Ecobank picks Nairobi as eastern, central, southern regional hub

Ecobank Kenya is set to be upgraded to be the regional hub of operations for 18 countries in a move that boosts Nairobi’s ambitions of being an international financial centre.

The pan-African lender is restructuring its regional clustering that effectively combines eastern, southern and central Africa under one cluster headquartered in Nairobi.
The other regional offices for the bank headquartered in Togo will be in Nigeria and Ghana.

“The group is putting a lot of emphasis on Kenya. Previously used to be the hub of East Africa operations but going forward it will be hub for 18 countries,” said Ecobank Kenya managing director Ehouman Kassi.

Some of the countries to report to Kenya include Cameroon, Gabon, Equatorial Guinea, Chad, Central Africa Republic, Congo Brazzaville, the Democratic Republic of Congo, Zambia, Zimbabwe and Mozambique. The cluster will also include Kenyan neighbours Tanzania, Uganda, Burundi, Rwanda and South Sudan.

The region had 275 branches with assets worth $4 billion (Ksh410 billion) and generating around $380 million (Ksh38.6 billion) in revenues as at end of 2014.

Lead driver

The East African region, in which Kenya is, was the smallest among the three clusters in revenues but had higher assets, $1 billion (Ksh110 billion), than South African operations valued at around $689 million (Ksh70 billion). In Kenya, the bank asset base stood at around $542 million (Ksh55 billion) last September.

“We want the Kenyan business to be as big as Nigeria and Ghana. The group is committed to put resources to ensure that Kenya as a hub is the lead driver in the region,” said Mr Kassi.

Ecobank Kenya has registered mixed results since entry in the country through the acquisition of East Africa Building Society in 2008. It posted profits in the first three years before sinking to a loss position in 2012 and is yet to return to profit. The parent company has injected over $98 million (Ksh10 billion) in the business over the last four years.

The government has been positioning Nairobi to have a well-functioning financial system to attract international capital issuers and investors and act as the gateway for capital into the eastern and southern Africa region.

Kenya is exploiting its strategic location as a gateway into eastern Africa and a fairly developed banking and capital market to place itself as the region’s financial hub.

Nairobi already hosts representative offices of global lenders including HDFC Bank, Nedbank, FirstRand Bank, Bank of China, Central Bank of India and Bank of Kigali.

Kenya has also stepped up its bid to host Africa’s first clearing house for the Chinese yuan, in a move that will cut the costs traders incur when converting local currencies to the dollar then to the Chinese currency.

Last year global financial services firm SWIFT disclosed plans to open a regional hub in Nairobi.

The Belgium-based company is known mostly for facilitating electronic bank transfers through a platform which interlinks banks and other financial institutions around the world to allow electronic funds transfer across multiple currencies.