Nedbank says committed to Ecobank link after QNB buys stake

Qatar National Bank bought a 12.5% stake in Ecobank for $290m.

Nedbank Group Ltd., the South African lender controlled by Old Mutual Plc, said it remains committed to its partnership with Ecobank Transnational Inc., even after the Togo-based firm sold a stake to a Qatari bank.

Qatar National Bank QSC, the largest Arab lender, bought a 12.5 percent stake in Ecobank for $290 million on Sept. 4, marking its first acquisition in sub-Saharan Africa. Nedbank formed an alliance with Ecobank in 2008 and has the option until Nov. 25 of gaining a 20 percent stake, a move that would give it access to bank customers in more than 30 African countries.

“If we exercise our rights, Nedbank would become the single largest shareholder in Ecobank,” Mike Brown, chief executive officer of the Johannesburg-based lender, said in an e-mailed response to questions today. “Nedbank and Ecobank are committed to our alliance.”

South Africa’s government pension fund administrator, the Public Investment Corp., owns 18.2 percent of Ecobank, with QNB now the second-largest shareholder, according to data compiled by Bloomberg. Ecobank, Africa’s most geographically diverse bank, said it’s discussing a strategic partnership with QNB to expand its reach in North Africa and the Middle East.

“We believe QNB would likely out-muscle Nedbank,” Jaap Meijer, an analyst at Arqaam Capital in Dubai, said in a Sept. 5 note. “We only see QNB’s stake in Ecobank as a first step as we believe QNB has ample capital to go after the full acquisition of Ecobank. This could result into a battle for Ecobank.”

Finance Projects

Nedbank has dropped 2.7 percent to 227.81 rand in Johannesburg trading since the Qatari bank announced its acquisition.

Albert Essien, CEO of Ecobank, isn’t immediately able to comment because he’s in a board meeting, he said in an e-mailed response to questions.

Nedbank has until late November to convert a $285 million loan it made to Ecobank in 2011 into an equity holding and then increase the stake to as much as 20 percent. The banks’ alliance is aimed at corporate customers, assisting businesses with cross-border transactions. Nedbank and Ecobank also work together on African financing projects.

©2014 Bloomberg News

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