Ecobank: 5 reasons new CEO Jeremy Awori will be walking a tight rope

George Bodo
By George Bodo

A SSA banks analyst, with 10 years of covering banks in Sub-Saharan Africa. He is also a thought leader on the financial sector as well as macro-economics.

Posted on Wednesday, 21 September 2022 15:38, updated on Thursday, 22 September 2022 15:39

Jeremy Awori (photo: facebook)

Ecobank Group’s recent announcement that Jeremy Awori, a Kenyan, would succeed Ade Ayeyemi as group CEO represents a break from the past, where its CEOs have largely been from West Africa.

Nonetheless, having had stints in Standard Chartered and Absa, much more ring-fenced brands, Awori will now be walking a tightrope in Ecobank, for five classical reasons.

1. ‘ETI is a thinly capitalized non-operating entity’

First, the Group’s holding (parent) company, Ecobank Transnational Incorporated (ETI), is a thinly capitalized non-operating entity that relies on medium term borrowings and dividend cheques from affiliates for capitalization.

The fragmentation of the group’s total capital of $2bn across the 34 operating affiliates doesn’t present a strong underwriting proposition. The task is either to build a new capital vehicle or establish strategic affiliate balance sheets that can easily be externalized.