By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The International Monetary Fund (IMF) on Friday affirmed that pan-African lender, Ecobank is in the right direction following an equity capital increase to meet regulatory capital requirements in Nigeria and prompt address of other concerns.
“The report contained a reference to the governance of Ecobank that referred to the period 2013-14. IMF staff is aware that Ecobank has taken a number of important and appropriate steps to address these concerns to avoid risks to financial stability. The recent news that Ecobank has raised equity capital for the group and announced an equity capital increase to meet regulatory capital requirements in Nigeria are further welcome steps in the right direction,” a statement from the Fund quoting Gerry Rice, director of communications said.
The IMF on Wednesday released a report on “Pan-African Banks—Opportunities and Challenges for Cross-Border Oversight”, which highlighted that the growth of pan-African banks is improving competition, driving innovation, supporting financial inclusion, and contributing to economic development and financial integration in Africa. At the same time, the report said that the rising reach and complexity of these banks pose regulatory and supervisory challenges.
The report affirmed that Ecobank Nigeria’s “relatively weak capital position remains a concern” and that rapid loan growth at the bank, which is a subsidiary of Ecobank Transnational Incorporated, raises suspicion of reckless lending.
Ecobank in refuting the report in a statement made available to InvestAdvocate on Thursday evening said it wishes to correct the misperceptions conveyed by an International Monetary Fund (IMF) report released on 4 February 2015.
According to the pan-African lender, the report suggests that ETI’s rapid expansion, lack of regulation and poor governance pose a wider threat to financial stability in Africa.
Ecobank says the report which contains some inaccuracies, is roughly 18 months out of date as regards some of its references to the Ecobank Group. “The internal governance issues that it refers to at Ecobank dated back to a period of several months between mid-2013 and early 2014. The Ecobank Group dealt conclusively with those internal governance issues at the time. The matter culminated in the dismissal of its then Group CEO, Mr. Thierry Tanoh, who was replaced by Mr Albert Essien in March 2014,” the bank affirmed.
The pan-African lender says it would be wrong for the report to inadvertently convey the perception that past governance issues still exist at Ecobank. A lot has taken place between the preparation of the aforementioned IMF report and the present time.
At the close of business on the Nigerian bourse, share price of Ecobank rose 0.12 percent to gain 0.02 kobo.
