[ 2012-03-05 ]
Ecobank’s strategic move
Ecobank Ghana Limited has assured that no employee
of The Trust Bank (TTB) will be laid-off following
its acquisition of the bank.
Mr. Sam Adjei, MD of Ecobank who gave the
assurance at a media interaction, explained that
the decision not to lay-off any staff of TTB is
purely a business one.
“Before the acquisition, we took a business
decision not to lay-off any staff of TTB, and
decided that in a situation where there is
duplicity of duties we shall create different
roles – which will mean that everybody will play a
part in the enlarged business.
“We decided every single member of staff, from the
top to the bottom, will be maintained. We shall
ensure that we put people in the right
He explained that there is a human-resource
committee comprising staff of the two banks,
working together to address concerns of every
member of staff.
“We have received fantastic cooperation from the
two institutions. We are extremely pleased with
the level of support we have received from the TTB
On possible closure of TTB’s branches, he said:
“We may re-locate branches, but not close them.”
With regard to the integration process, he said
“we have been able to link the systems of the two
banks, such that clients of both banks can
transact business with any of them.”
In December last year, Ecobank Transnational
Incorporated (ETI), the parent company of Ecobank
Ghana, acquired a 100% share in TTB in a deal
estimated at about US$135million. The merger
promised to make the enlarged business Ghana’s
biggest bank in terms of assets and
When the news of the acquisition broke out,
concerns were raised over possible lay-offs of the
470 permanent staff of TTB by the new owners.
Ecobank Ghana already boasts a staff-strength of
Mr. Adjei said by June this year, the integration
process will be completed, and TTB will have been
liquidated so that the enlarged business will
properly take shape.
Explaining the rationale for the acquisition, Mr.
Adjei said: “In all the 33 countries where Ecobank
operates, our aim is to remain among the top-three
banks in all the measurements and in all the
ratios -- so after we had achieved that in Ghana
after 15 years of operations, we then decided to
focus on becoming the first, both in assets and in
“We realised to achieve that, we needed to grow
organically by extending our reach with more
branches – or acquiring a bank that could provide
the necessary synergies. We therefore decided to
acquire a bank, and TTB became the natural choice
because of its special positioning in the market.
“We were very strong in corporate and retail
banking, but we were not strong in the SMEs and
the local corporate segment of the market. It
became obvious to us that TTB would be the best to
fit into that gap because it is performing
strongly in the SMEs and the local corporate
Ecobank Ghana for the past five years has achieved
a cumulative average growth rate of 31 percent in
its profit before tax, while its total assets have
been growing by 29 percent – with customer loans
and deposits growing by 25 and 27 percent
Instructively, by the end of the third quarter of
last year, Ecobank had total assets of
GH¢2.2billion, emerging as the second-biggest bank
after Ghana Commercial Bank. It also posted a
profit before tax of GH¢79million, becoming the
second-most profitable bank after Standard
Chartered Bank Ghana.
In terms of synergies, he said the acquisition
will potentially position Ecobank to become the
biggest in terms of assets and the most profitable
bank in the country.
He said: “We shall have synergies in the value
chain. We shall see a massive deployment of loans.
Our loan to deposit ratio will increase
Before the acquisition, interest income
contributed 58 percent, while non-interest income
provided 42 percent of Ecobank’s net income.
However, Mr. Adjei noted that the ideal situation
should have been 50:50.
The combined capital of the two banks will now
total US$ 225million; hitherto Ecobank had
US$160million while TTB had US$65million. The
enlarged business will now have the highest single
obligor limit in the industry, which allows for
Source - Bus & Fin Times
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