South Africa’s Nedbank Group has agreed to buy a 20% stake in pan-African lender Ecobank Transnational (ETI) for $493m.

The deal comes just weeks after Qatar National Bank raised its holding in Togo-headquartered Ecobank to 23.5%.

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As per the terms of the agreement, the South African bank will convert $285m of debt into equity in Ecobank and top up to a maximum 20% subscription under the terms of a 2011 loan agreement.

Also, Nedbank Group will be afforded the right to representation on the ETI board. The Nedbank Group has nominated its COO, Graham Dempster, to join the ETI board.

ETI Group CEO Albert Essien said: "It is a win-win for ETI and Nedbank Group. Our two institutions have been strong strategic partners since we formed our unique one-bank alliance six years ago, and it is in our mutual interest to ensure that this alliance grows from strength to strength.

"It will remain steadfast as we continue to provide the best quality banking services to our numerous clients across the largest banking network in Africa."?

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Mike Brown, Nedbank Group chief executive said: "This shareholding represents an important step in the consolidation and deepening of the strategic and technical banking alliance we have with ETI.

"This investment also offers our shareholders participation in earnings growth from the faster growing markets in sub-Saharan Africa."

ETI and Nedbank Group established their strategic business alliance in 2008.

Ecobank has a presence in nearly 40 sub-Saharan countries and is particularly strong in West African countries such as Nigeria.