Emmanuel Ikazoboh was brought in to Ecobank as chairperson in June 2014, as the company was going through tumultuous times. The bank was being accused of poor governance, and there was talk of cliques, in-fighting and low morale. But a year on, the ship seems to have been steadied, even if the dispute with former CEO, Thierry Tanoh, continues.
In a rare interview on the sidelines of their General Assembly in Tanzania, Ecobank’s chairperson spoke to African Banker about how things are going.
Ikazoboh is no stranger to crises. The softly spoken Nigerian, a chartered accountant by training, seems to take a liking to solving problems, especially those relating to governance. Indeed, it is not by chance he was chosen as the man for the job when the bank was accused of mismanagement in 2013-2014.
The bank had lost its chairman Kolapo Lawson and its new CEO Thierry Tanoh in a short space of time. KPMG was called in to conduct a comprehensive audit, and it was them that first sounded the idea of Ikazoboh as chairperson following his success as acting director of the Nigerian Stock Exchange (NSE). There, he had been parachuted in to stabilise Nigeria’s capital markets in 2010 after the NSE’s board had sacked its CEO over issues related to transparency, poor governance and supervision.
Within 18 months, Ikazoboh had managed to improve the management structures, rebuilt trust in the exchange, and recruited an executive team to take over from him.
Ikazoboh says he was not daunted by the new task at Ecobank, and as a pan-Africanist the challenge had a certain appeal. His experience at Deloitte, where he’d led the West and Central African practices, gave him sufficient knowledge of operating on a continental level. Sitting on the African board at Deloitte, he was part of the team that oversaw the integration of the company’s practices across Africa. Nevertheless, the Ecobank job was not plain sailing.
“It was a bit more complex than I thought,” he says. “From a corporate governance perspective you had a situation where the bank had grown so rapidly over the last seven or eight years that in the process of growing, certain processes and structures were not put in place.”
Ikazoboh suggests he spent much of the first year strengthening issues relating to governance. And in a year of refocus and renewal, he helped implement a 51-point plan to improve internal controls and corporate oversight.
“When you talk about corporate governance for a bank like Ecobank, it’s a bit different from other banks that are only in a particular country,” he says. “This is a situation where you have subsidiaries that are in various countries with different cultures and different regulatory requirements. And you want to have a common standard across [all subsidiaries], a minimum standard which we cannot go below, and then in addition to that, in each environment, you had to now put in place certain structures to also address local needs.”
The other urgent item on his list was that of appointing a new Group CEO; Albert Essien, who had taken over from Tanoh in March last year would have to stand down on reaching 60, in June 2015. A committee was formed and they appointed global headhunters Stuart Spencer, with the board eventually appointing Citigroup veteran, Adebayo Ayeyemi, who will take the helm on 1st September.
Ikazoboh is confident Ayeyemi is the man for the job. He feels Ayeyemi comes with the right experience – which includes being the first black African to be made the CEO for sub-Saharan Africa for Citibank – and the right attributes as the bank consolidates its activities and forges ahead.
“Don’t forget that the culture to drive and build the institution and expand at the rate at which it did needed an authoritarian culture where the chief executive and his team had to drive things,” says Ikazoboh. “Having achieved that expansion, you now need to have an innovative culture where people can come up with different ideas so the next culture has to be an innovative culture, and we needed someone who has worked in an innovative environment to now take it to that level.”
After a tough year in 2013, the bank’s performance in 2014 was a lot stronger with operating revenue growing 14% and net earnings growing 230% to $339m. Cost-to-income ratios, which were high compared to the industry average, were also brought down although Ikazoboh admits more needs to be done.
Also of possible concern to the bank are the dominance of the Nigerian subsidiary in the company’s results (accounting for a little under half) and the overwhelming performance of the treasury department to the company’s profitability (which at 45% is much higher than the industry average).
But Ikazoboh is not worried. He is comfortable with the bank’s wide footprint and sees it as a clear competitive advantage.
“The signpost in the 36 countries gives us a position today that no other bank in Africa has. There is a seamless movement of funds across the region because of the subsidiaries, and we have a common technology platform so that is a competitive advantage over other banks in Africa. We have to look at each subsidiary and know where we have to do only retail banking, where we have to do only corporate banking and where we have to do a combination of both retail and corporate, so that is the restructuring that is taking place to ensure that there is efficient use of capital in each of the locations where we are.”
During the General Assembly, and in subsequent discussions, Ikazoboh mentions tough global economic conditions and other headwinds such the fall in the price of oil and other commodities. But he remains bullish and expects performance this year to be even stronger than previous years.
The bank did not pay dividends in the last two years, something shareholders have been complaining about. Yet Ikazoboh attributes this primarily to regulatory requirements in each of the subsidiaries. Cross-border regulation was a central issue when problems arose last year. In short, it was asked, how could regulators ensure that failure in one subsidiary did not create systemic risk for subsidiaries in other countries?
“You must have read the IMF report on this and there was a concern by the regulators that ETI [Ecobank Transnational Inc] was a regulator’s nightmare for some of them because of the way it is structured. What we kept making them understand is that we try to run a ring around each of our clusters to ensure that if there are challenges it will be limited within each cluster, so the holding company – actually that is ETI itself – ensures that we monitor each of the subsidiaries and not transactions. Although there are transactions between [subsidiaries] these transactions are at arm’s length and properly secured to ensure that there will be no drastic effects on the operations of any of the subsidiaries.”
Another question still on many people’s minds regarding Ecobank is the prolonged dispute with former CEO Thierry Tanoh, who is suing Ecobank for defamation and unfair dismissal. He has won a case in the Ivorian and Togolese courts, but the bank is still challenging these; the courts in Abidjan and Lomé had ordered Ecobank to pay Tanoh in excess of $20m.
Ikazoboh mentioned that the bank would prefer to settle this outside the courts, but following a recent court order in the UK in July that had overturned an order blocking the payments, they may have to draw the line, cut their losses and move on.
A year on from his appointment, does he regret in any way coming on board? “It’s been very challenging, more than I thought,” he says. “But there has not been a day when I have regretted my decision…This is the best board [I have worked with] and I’m not saying it because I’m a member of that board…These are people who have worked in financial institutions, most of whom have retired and just want to give their best and to leave behind something for their children or children’s children.”
As we end our conversation, Ikazoboh is keen to emphasise, in his discreet and understated style, that governments and regulators need to appreciate the hard work the staff of the bank put in.
Whether or not this is a veiled message to the authorities in Togo and Côte d’Ivoire it is hard to say, but the unwavering commitment of his team is not, for Ikazoboh, to be questioned: “All the staff are so passionate about this institution that I think they should need to be encouraged and the encouragement should come by way of the governments of Africa encouraging [their own] institutions and giving it the necessary support to achieve the economic integration of Africa which is the vision of the institution.”
Omar Ben Yedder
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