Pan-African lender Ecobank Transnational expects to double Nigeria’s contribution to its group profit next year from around 20 percent after integrating former rival Oceanic Bank, which it bought last year.

ETI chief executive Arnold Ekpe told an analysts conference call on Monday that Oceanic Bank had turned profitable after Ecobank acquired the loss-making group in 2011 and spent around $80 million integrating it.

Last week, Ecobank had reported a 6 percent fall in first-half pretax profit to $126.3 million. Ekpe said the decline was mainly due to one-off integration costs and he expected a pick-up in the second half.

Nigeria contributed $25.4 million to the pretax profit in the first half.

Ekpe said ETI now had the largest branch network in Africa with 1,200 branches, following the acquisition of Oceanic and Trust Bank in Ghana last year.

“The real profitability will come in next year … Nigeria should contribute between 30-40 percent of profits next year,” said E k pe, who is due to retire at the end of 2012.

“Oceanic on a stand-alone basis is now profitable. We have put in some capital there, so it’s a much better capitalised business,” he told the call.

He said the bank was sticking with a return on equity (ROE) target of between 20-25 percent over the medium term. Return on equity – a measure of a bank’s profitability – was 10.7 percent in the first half.

The lender which has operations across 32 out of Africa’s 54 countries was expecting to commence operations next month in Equatorial Guinea, then Mozambique and Angola next year before concluding a continent-wide expansion, Ekpe said. 

“We are pretty much at the end of our geographic expansion. West Africa remains where we really have long-standing presence … East and Southern Africa represents start up operations, we have not been there for more than 3-years,” he said.

He said representative offices will be opened in China this year to be followed by the United States next year.

Ekpe said Ecobank had concluded a capital raising of around $400 million this year to bolster its balance sheet after its acquisition spree last year and had increased its capital adequacy ratio to 20.3 percent.

The independent lender, which began as a corporate bank in the 1980s, has expanded into retail banking in the last two decades. Its rivals include Africa’s big retail banks such as Standard Bank and Absa Bank

Source: Reuters (Reporting by Chijioke Ohuocha; Editing by Jane Merriman)