Thu Oct 29, 2015/Reuters

Pan-African lender Ecobank has suspended plans to sell shares to raise capital for its Nigerian unit because market sentiment is weak and loan growth in Africa’s biggest economy is slow, its CEO said on Thursday.

In July, Ecobank obtained board approval to raise fresh funds to help strengthen the capital base of its Nigerian unit as the country’s banks prepare to adopt stricter international capital requirements. It did not say how much it planned to raise, but the Lagos-listed bank’s business has since deteriorated as the Nigerian economy has continued to be hit by weak oil prices.

Nigeria contributes 42 percent of group revenues and CEO Ade Ayeyemi, who took over in June, said he expected marginal loan growth in the second half. “The market for loans is not growing,” he told an analysts’ call.

Ayeyemi said he expected the group to see total loan growth across all markets of just 5 percent this year, down from 15 percent last year.

The bank’s Nigeria unit has a capital ratio of 16.9 percent, above a regulatory requirement of 16 percent and Ayeyemi said the decision to deploy more capital would depend on a business review.

Nigeria’s central bank has been injecting cash into the banking system since this month in a bid to increase lending and stave off recession in Africa’s top oil producer, which has suffered as oil prices plunged.

Several Nigerian banks have lowered their loan growth guidance for this year, citing rising regulatory and economic uncertainty.

Ayeyemi said Ecobank has concluded its African expansion with presence across 36 countries, adding that the bank will focus on growing its share in the different markets as it consolidates its footprint on the continent.

On Tuesday Ecobank reported a 2 percent fall in its nine-month pretax profit to $398 million.