Following the announcement by Ecobank Nigeria Limited last week that its Managing Director/Chief Executive Officer, Mr. Jibril Aku, will step down on December 31, 2015, speculation has grown in industry circles over who is likely to succeed him. Tony Chukwunyem reports
Compared with the length of time another leading lender used in naming a successor to its departing Managing Director/Chief Executive Officer, a few months ago, the less than six week period that Ecobank Nigeria has set for announcing a replacement for its outgoing MD/CEO, Mr. Jibril Aku, would appear rather short.
In a statement to the Nigerian Stock Exchange (NSE) last Wednesday, the bank’s parent company, the Ecobank Transnational Incorporated (ETI), announced that Mr. Aku will be stepping down from his position as the Managing Director of Ecobank Nigeria, the Group’s largest subsidiary, by the end of December 2015, after a five-year tenure.
According to the statement, Mr. Aku would take on another senior role in the group in the first quarter of 2016. Commenting on the development, the Chairman of the Ecobank Nigeria Board, Mr. John Aboh, congratulated Mr. Aku on what he said was the departing CEO’s commendable performance and announced that the board will immediately activate the process of selecting a successor who will be unveiled before the end of December 2015.
Industry analysts who spoke to the New Telegraph at the weekend argued that planning to conclude the selection process for a new CEO in less than six week was probable an indication that the Ecobank Group may have already drawn up a list of likely successors who would be chosen from within the bank.
Deputy Managing Directors
Indeed, the bank, like some of its peers, currently has two Deputy Managing Directors (DMDs) who most analysts point out would have been the only contenders for the position if they were in a financial institution where DMDs are clearly designated as successors to the CEO. One of these DMDs, Mr. Anthony Okpanachi, for instance, has held the position since April 2013. He served as the Managing Director at Ecobank Kenya Limited until April 28, 2013 and was also the Regional Head for East Africa, comprising Kenya, Uganda, Tanzania, Rwanda, and Burundi within the Ecobank Group.
His banking career spans 25 years with 17 of those in senior management level positions across various strategic business units and functions such as trea-sury operations, retail business development, regional business management, and top level relationship management amongst others.
Similarly, Ms. Foluke Aboderin, DMD (Corporate Banking), has banking experience spanning over 22 years during which she managed the relationships of multinationals and top-tier local firms operating in key sectors of the economy. Prior to joining Ecobank 2007, she had worked with First City Monument Bank (FCMB) and Citibank South Africa. However, as a banking industry source noted, since the Ecobank Board did not immediately name either of the DMDs as successor to Aku, it could also be considering Executive Directors of the bank for the position.
In fact, one of its Executive Directors, Mr. Oladele Alabi, has also been serving as a member of the bank’s board as Executive Director of Finance & Control since August 2011. Mr. Alabi has over 18 years of diversified experience in banking, having worked in various areas including Treasury and Financial Institutions, Strategy and Business Development, Corporate Banking and Risk Management groups in the Ecobank Group.
He also has country supervision and management experience, as the pioneer Managing Director for Ecobank Uganda since inception in January 2009 till August 2011. The Executive Director joined Ecobank Nigeria in 1993 and rose to senior management position in the affiliate before his transfer to the group in January 2007.
Interestingly, Aku was the Executive Director in charge of Treasury & Financial Institutions before he was appointed MD/CEO of the bank, taking over from Mr. Offong Ambah, five years ago.
Chances of an ‘outsider’ getting the job
But the New Telegraph also gathered that there is the possibility of the ETI board appointing someone who is not part of the current management team of the Nigerian subsidiary to the position. According to a source in the know, the Group could decide to appoint a capable replacement from any of its offices in the 36 countries where it operates on the continent.
The source said, “You know that the Nigerian subsidiary is ETI’s largest on the continent so the board always takes a special interest in it. The Nigerian banking industry like others in other parts of the continent is passing through a difficult period at the moment so whoever is selected as the next CEO of Ecobank Nigeria must be someone they have a lot of confidence in.”
It would be recalled that ETI’s Group CEO, Mr. Ade Ayeyemi, a Nigerian, who assumed office in June this year, recently announced that the Group had foreclosed plans to sell some its stake in Ecobank Nigeria Limited. The bank had said that it would sell part of its stake its Nigerian subsidiary by the end of the year to boost its working capital and meet up with the Central Bank of Nigeria (CBN)’s directive on minimum capital threshold. It had planned to raise as much as $400million with a sale of about 25 per cent of the unit.
But Ayeyemi said the plan had been shelved due to falling equities’ prices. According to him, falling market values mean the bank would not get good deal from the sale. “The market is not right for us to be selling part of that unit. We will not be doing any dilution at the moment. You cannot sell an asset you don’t have to sell at the time when market prices are at the bottom of the trough.”
Ecobank Nigeria’s third quarter results for the year are not yet available but figures for the period announced by the Group show that its nine-month profit after tax (PAT) for the period ended September 2015, increased 15 per cent to N60.416 billion from N52.491 billion recorded the same period of last year. Similarly, Profit Before Tax (PBT) grew 18 per cent to N78.665 billion from N66.497 billion posted a year earlier.
Gross earnings also climbed up from N268.951billion in the third quarter (Q3) of 2014 to N315.833 billion in the review period of 2015; showing a rise of 17 per cent. While commenting on the performance, Ayeyemi had said, “While our financial results were impacted by various factors, the strength of our diversified pan- African business model ensured a balanced outcome. We reported US$398 million in pre-tax profits, down 2 per cent from a year ago, largely due to adverse currency movements and operational and impairment losses in the third quarter. We see looming headwinds ahead and as a result expect reported 2015 profits to come in lower than expected, but relatively flat in constant dollars.”
It is thus clear that whoever is selected to takeover from Aku as MD/CEO of Ecobank Nigeria Limited by the end of the year would have to strive to take the lender to a higher position than the exiting helmsman left it. As ETI boss, Ayeyemi put it while reacting to the new role for the outgoing CEO, “Aku has been instrumental in leading the Ecobank franchise to its position in the Nigeria banking industry. With the Oceanic Bank acquisition, Aku positioned the bank from number 13 to its current position of number six.”
Conclusion
However, as a Senior Financial Analyst at Berta Investments, Mr. Ben Halim, pointed out in chat with the New Telegraph, “It does not really matter whether whoever is selected to succeed Aku is from within the bank or whether he/she is from another bank.
What is important is that the Board must give its total support to the new CEO. The operating environment is quite challenging at the moment, so the new CEO should not be distracted by the kind of boardroom squabbles that ETI experienced not too long ago.”