Will Nedbank have any physical presence wherever Ecobank is?
The Ecobank strategy for Nedbank is really around West and Central Africa, that’s where we believe Ecobank has got strong banks and they are well positioned; and
Nedbank doesn’t have any appetite to
expand our physical presence into those jurisdictions.
We have our own expansion drive in terms of SADC countries and East Africa, so there will be overlap but that will be in the smaller countries, where we both have smaller banks and not the big economies like the Nigerias and the Ghanas.
Mozambique, Malawi and Zimbabwe are the countries where we have overlap, but once again we have recognised that from the outset and we’ll have a certain set of rules where we collaborate and work together.
Will a Nedbank customer be able to use his card in an Ecobank ATM?
Yes, and very importantly the non-branded Ecobank card, which is not a Visa or a MasterCard, works on Nedbank ATMs across South Africa. This was quite nice because we were able to launch that just before the soccer World Cup in 2010 and, very surprisingly, the volume of the usage of those cards is quite enormous.
And while these are not moneyspinners, they provide service for clients. If you go to any Nedbank ATM, there’s a clear message to say we take Ecobank cards. We rebranded all our ATMs, thousands of them across the country.
One would imagine that a major part of the strategy is to encourage more intra-African, cross-border business?
There’s no doubt about that. From the outset we knew the concerns of corporates wanting to expand north into the rest of Africa, specifically in West and Central Africa.
It’s an extremely intimidating process for them: the language barrier, different legal and regulatory systems, etc. A lot of companies have failed just because they weren’t able to secure good local partners and they didn’t necessarily do their homework.
The issue is really about local knowledge. You can go to research institutions and get reports about this country or company but all that is not much use unless you have expertise on the ground.
That is where Ecobank comes in. Their bankers go well beyond numbers and basic analyses; they know people, cultures, customs, languages, traditions, perspectives, viewpoints, etc.
Ecobank now has a several big investors: yourselves, Qatar National Bank (QNB), PIC (Public Investment Corporation), IFC (International Finance Corporation). Are you happy with your new partners?
I suppose for us what’s important is that it increases the shareholder base and, secondly, it increases the client base of Ecobank as well.
In terms of QNB taking up that stake, there are clear benefits if you look at it from a geographic perspective – referring clients from the Middle East to Middle Africa and vice versa.
Do you have some kind of agreement preventing, say, Ecobank from diluting shareholding any further should they think of doing that, or it doesn’t concern you?
We certainly would like to remain at 20% and shareholders in terms of the ETI articles have a pre-emptive right in terms of capital raising.