Africa: Ecobank offering

On Monday, Ecobank will make African history with its $2.5 billion rights issue, in a sign of the dramatic growth of the region’s banking sector.

Togo-based Ecobank is listed on three West African bourses: the Nigerian, Ghanaian and the BRVM in Ivory Coast (a regional bourse serving eight francophone countries); and the rights issue will be the first to take place on multiple African exchanges.  It will also be the largest issue outside of South Africa. 

The rights issue is an indication of the growing role of regional bourses in raising capital, and attracting interest from outside the region.  Moreover, Ecobank’s move underscores the opportunity for expansion in the African banking sector, especially outside South Africa.  Ecobank already operates in 25 African countries, mainly in West Africa, although in the last two years it has expanded into Central Africa, and in June entered the Kenyan market. 

With economic growth across the region averaging over 6% for the past three years (and over 5% even for oil-importers), demand is growing for banking services.  The ability to provide services has increased with better technology, including improved telecommunications, opening the possibility for mobile banking.  In this context, Ecobank’s rights issue should attract strong interest.