Ecobank Ghana Limited has today completed its merger with The Trust Bank (TTB), creating a bigger bank that is strongly positioned to serve the growing banking needs of the Ghanaian economy.
Ecobank is keen to expand its SME activities, hence the merger with TTB which has a strong presence in the local corporate and SME sectors and is seen as highly complementary to Ecobank Ghana’s leading role in retail and corporate banking.
The combined networth of the new entity will now total about US$225million after the addition of TTB’s US$65million to Ecobank’s hitherto US$160million in capital. The enlarged business now has the highest single obligor limit in the industry, which allows for increased lending.
Additionally, the combined entity offers customers access to a wider network of 78 branches, 165 ATMs across Ghana, over 1.6 million Visa-branded ATMs worldwide and 24 million Point of Sale Terminals. Ecobank also now provides a wider range of improved products and services to its customers and the banking public.
Mr. Sam Adjei, MD of Ecobank, said the merger of TTB was a strategic move by the bank to consolidate its leadership position in the Ghanaian banking industry.
“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 profitability.
“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 merge with 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, and wish to be even stronger 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 segment.”
Earlier during the merger process, Mr. Adjei assured that no employee of The Trust Bank (TTB) will be laid-off following Ecobank’s merger of the bank, putting to rest concerns that had been raised over possible lay-offs of the 470 permanent staff of TTB by the new owners.
“Before the merger 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 positions,” he said.
In terms of synergies, Mr. Adjei said the merger positions Ecobank to potentially become the biggest in terms of assets and the most profitable bank in the country.
He said: “We will have synergies in the value-chain. We will see a massive deployment of loans. Our loan to deposit ratio will increase dramatically.”
Before the merger, interest income contributed 55 percent while non-interest income provided 45 percent of Ecobank’s net income. However, Mr. Adjei noted that the ideal situation should have been 50:50.
Ecobank Ghana has for the past four years achieved a cumulative average growth rate of 38 percent in its profit before tax, while its total assets have been growing by 35 percent — with customer loans and deposits growing by 33 and 39 percent respectively..
At the end of last year, Ecobank had total assets of GH¢2.1billion, emerging as the second-biggest bank after Ghana Commercial Bank. It also posted a profit before tax of GH¢105million and after-tax profit of GH¢72million.
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 profitability.
By Theophilus YARTEY
