Qatar National Bank (QNB) on Thursday bought a 12.5 percent stake in Ecobank for about $200 million, its latest purchase in a drive to be the biggest bank in the Middle East and Africa by 2017.
QNB bought the shares from Nigeria's state-owned "bad bank" Asset Management Company of Nigeria (AMCON). AMCON acquired the Ecobank stake when the pan-African lender merged its Nigerian operations with Oceanic Bank, a failed lender that AMCON helped recapitalise.
It is the Qatari lender's second African purchase in the past two years. In March 2013, it bought Societe Generale's Egyptian business for $2 billion and the bank is also present in Libya, Mauritania, South Sudan, Sudan and Tunisia.
Ecobank spokesman Richard Uku confirmed the AMCON share sale. He said QNB was now the second-largest shareholder in the pan-African lender after South Africa's state-owned Public Investment Corporation Ltd.
Stockbrokers told Reuters $200 million of Ecobank shares were transferred to QNB on Thursday at 20.01 naira each, an 18 percent premium to Ecobank's latest price of 17 naira.
A source familiar with the matter said Morgan Stanley had advised QNB on the deal.
"This deal is much much bigger than a Qatar bank taking a stake in Ecobank. We could see a wave of Middle East money coming into African banks," said Akinbamidele Akintola, Africa Equity Sales executive at Renaissance Capital.
QNB has said it wants to become the largest bank in the Middle East and Africa by 2017. At the moment, it is second in terms of assets to South Africa's Standard Bank.
The Qatari bank's chief financial officer, Ramzi Mari, told Reuters in February it was looking for acquisitions in Turkey, Morocco and sub-Saharan Africa to help achieve that goal.
Foreign lenders are keen to tap into the growth potential in Africa. Less than a third of sub-Saharan Africans have bank accounts, and an even lower percentage of firms hold a loan or line of credit.
As well as huge untapped markets, margins are attractive, with the spread between borrowing and lending rates more than 10 percent in many countries, compared to 2 percent or less in many Western countries.
Lagos-listed Ecobank, which has a presence in 36 African countries, expects its capital adequacy ratio to hit 18.7 percent of assets by the end of 2014, after debt conversions to equity, up from 17.5 percent in the first half, CEO Albert Essien said.
The minimum capital adequacy ratio in Nigeria is 16 percent.
Essien said last month he expected South Africa's Nedbank to convert a $285 million loan into shares in Ecobank before the end of the year and top up the conversion amount with $206 million to give it a 20 percent stake in Ecobank.SHOW MORE