Ecobank Transnational, which employs 17,000 workers across 36 African countries, plans to shut branches and cut jobs as the pan-African lender steps up investments in digital platforms.
“We believe that our strategy, our ability to meet our commitment to society can only be achieved with digital. Every interaction with us we want it to be digital,” said Ade Ayeyemi, group managing director, Ecobank Transnational, in an interview on Wednesday. “Today Ecobank runs a data center for all its 34 banking affiliates in two locations – Accra and Lagos. And that connectivity enables us to roll out products and services across all the countries where we operate in just one go.”
The bank’s revenue for the first quarter of 2017 rose 3 per cent to $425 million as fixed operating costs remained low relative to the bank’s variable operating costs, buoying pre-impairment income by 10 in constant dollars. The Nigerian operation of the bank contributes 40 per cent of its revenues.
Ayeyemi said that the decision to adopt digital platforms for its banking services will improve customers’ experience as, according to him, they no longer have to leave their homes and offices in order to do their banking transactions.
“When we decided to have connectivity for corporates, we were able to roll that out in 34 countries. When we have connectivity to consumers we were able to roll that out in 34 countries.”
“This means reducing our branch network, using technology to deliver to customers and processing transactions centrally,” Ayeyemi told journalists at the on-going World Economic Forum in Durban South Africa. “We believe that this business model can deliver profitability to our shareholders.”
Plummetting commodity prices and unfavourable currency swings in some of the economies of Ecobank’s operations had pressured the lender’s margins, denting the returns hopes of key shareholders such as South Africa’s Nedbank and Qatar National Bank. Ayeyemi said a recovery in oil prices in 2017, which would result in higher import revenues for African economies dependent on crude sales, should spur the bank’s improved performance.
Ayeyemi, who previously led the Citigroup in Africa but assumed Ecobank headship in 2015, said that the bank will leverage technology to reduce its branch network and deliver improved value to the shareholders. He said that said the expansion into online platforms would lead to layoffs.
INNOCENT UNAH
