South Africa’s fourth largest bank, Nedbank, has
announced an alliance with Ecobank Transnational, the pan-African
banking group based in the west African state of Togo, in the hope
of extending the reach of both banks further across the

The alliance will initially be focused on the wholesale and
corporate banking side of both businesses, although the long term
plan is to make the enterprise fully integrated across the whole
banking spectrum, unifying a network of some 1,000 branches in 30

Ecobank-business metrics, 2008Nedbank, with total assets of around $54 billion, is the
larger of the two and will retain its focus on banking operations
in the Southern Africa Development Community. Ecobank, with assets
of around $7 billion, will continue to operate mainly in the
continent’s less mature markets.

The partnership means that Nedbank, a subsidiary of
London-listed insurer Old Mutual, will have access to the rest of
the continent for the first time, enabling it to better serve
expanding South African businesses. Ecobank will be able to move
into the more advanced southern African market and still focus on
high growth markets in West Africa like Ghana and Nigeria.

Not a merger

Graham Dempster, the chief executive of Nedbank Corporate, and
the man responsible for the alliance between the banks, told
RBI that the deal should not be seen as a merger –
although the idea has not been completely ruled out.

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“The point here is for both banks to focus on what they do well.
Our absolute aim at this point is to entrench the alliance by doing
really good business with lots of customers that will benefit both
banks,” Dempster said. “It is a long-term game, we will take it
step by step, nothing is ruled out.”

In his view, moreover, Dempster thinks there will be more banks
following their example.

“The need to be completely clear that you have a competitive
advantage when you move into new territories has become much more
emphasised [in the context of] the global financial crisis,” he

“So collaboration where you leverage each other’s strengths,
capital efficiency, cost efficiency, sharing of resources, just
makes logical sense when you need to deliver shareholder

Arnold Ekpe, CEO for Ecobank, said the alliance is designed to
build a true pan-African champion and represents a “win-win”
solution for both institutions, their shareholders and particularly
their customers.

“Ecobank currently operates across 25 countries in sub-Saharan
Africa. Nedbank is one of South Africa’s leading banks.

“No other banking group can currently match this alliance. Our
collaboration with Nedbank will allow us to extend our operations
more effectively from middle Africa to the southern African market
in a very capital-efficient manner.”

He added: “It also offers a good platform for Nedbank to grow
its business in other parts of the African continent.”

China-Africa developments

In June, Ecobank and China-Africa Development Fund (CADFund)
signed a memorandum of understanding to support Chinese/African
enterprises in Africa. The fund seeks to cooperate and offer
optimal support to the activities of enterprises and projects in
Africa owned by Chinese and/or Africans. China Development Bank has
released $1 billion to CADFund as the first tranche of the total of
$5 billion committed to this initiative.

Ecobank celebrated its 20th anniversary in November, a ceremony
attended by Togolese president Faure Essozimna Ggnassingbe. The
event also saw the start of the construction of a new headquarters
building in Lome. Ggnassingbe said: “It is gratifying to see
Ecobank, which had its modest beginnings right here in our capital
city, has since grown into the truly continental banking
institution that it is today.”