Celebrating its 10th anniversary, Ecobank International SA (EBISA) has set its sights on becoming the one-stop shop for African currency and trade.
Ecobank’s declared aim is to consolidate a modern pan-African bank and to contribute to the economic development and financial integration of the continent. Payments and trade are inextricably linked and are the integral components of the bank’s commitment to developing Africa’s economies and to growing and diversifying sustainable intra-regional and international trade with Africa. Ecobank has a full banking presence in 33 countries in Sub-Saharan Africa, connected by a single digital banking platform. Outside of Africa the bank also has a licensed operation in Paris, seat of the bank’s international platform, with representative offices in London and Dubai.
The bank’s Paris-based operation, Ecobank International SA (EBISA), is celebrating its 10th anniversary this year. EBISA provides corporate banking products and services, including international trade finance and bank guarantees, to multinational companies, commodity traders, non-governmental organisations (NGOs), financial institutions and local corporates, as well as stock financing for commodity traders and processers with operations across Africa. EBISA also provides a unique platform for international investors and organisations to gain access to 30 African currencies from a single gateway. EBISA’s trade team adheres to the highest standards of KYC, AML and risk management, conscious of the global regulatory tightening of standards and the (sometimes undeserved) perception of high risk in the African markets where we operate.
The highly experienced Paris trade team is led by Massetou Traoré Diaby. Our plain vanilla trade specialists understand the dynamics of the global business environment and leverage our financial resources, technology and global correspondent banking network to help local African banks service their pipeline of trade transactions. We offer a full range of letter of credit (LC) services, including commercial LCs and standby LCs. In 2017 the volume of our trade business reached US$500mn, with 70% of LCs discounted in favour of suppliers at highly competitive rates. EBISA was able to handle such a volume of trade transactions, and plans to double this in 2018, thanks to its strong distribution desk, which has developed a powerful network of DFIs, insurers and FIs.
In addition to EBISA’s plain vanilla offering, Julie Coulon heads the newly created structured trade and commodity finance desk. This desk provides structured commodity finance for traders dealing with Sub-Saharan Africa, with a heavy focus on SMEs as they account for most international flows. Among its offering, EBISA finances exporters of capital goods and gives supplier credits of up to three years. The bank is also helping to reduce financing costs for African players by providing them with offshore commodity finance, reducing their previous reliance upon international banks and providing stable appetite for African country risk. EBISA also provides credit facilities to EU-based corporates to support their African exposures.
EBISA’s network and partnerships enable it to tap into Africa’s trade flows
A key objective of the trade team in Paris is to tap into Africa’s international flows and to leverage the bank’s pan-African presence to deliver cross-border financing and payment solutions to traders. Built on its extensive local knowledge of African markets, Ecobank is the only capital markets group with brokerages across Sub-Saharan Africa who work closely with leading international financial institutions. This gives Ecobank a competitive advantage over other African banks, because it has the physical presence, technical capacity, local knowledge and experience in countries where trade regulation can be complicated. For example, in Zimbabwe, one of the bank’s most successful affiliates, Ecobank can identify transaction, advisory and deal-making opportunities that might not be apparent to other banks or advisory firms.
Ecobank maintains strong relationships with a wide range of international, regional, multilateral institutions and export credit agencies, which enhances the bank’s trade financing capacity and gives it the ability to serve a wide range of sectors. These partnerships enable the bank to offer relatively long repayment terms as well as grace periods. Ecobank is also well placed to offer trade structures for large ticket transactions, allowing for the sharing of credit risk between financial institutions and access to international financing. EBISA’s trade finance clients benefit from ready access to capital markets and a powerful distribution platform for primary and secondary markets.
Financing oil and soft commodities is a key focus
Trade flows in Africa are led by exports of crude oil and petroleum products, and an array of soft commodities – principally cocoa, cotton, coffee, tea and cashew nuts. These mostly-raw commodities, alongside imports of capital and consumer goods, are the key drivers of trade in Africa. Ecobank maintains a keen focus on agri-business trade, especially in Ghana and the countries of the Francophone West African Economic and Monetary Union (UEMOA). Hydrocarbons also play a big role in African trade, and the bank’s oil business is focused on the import of refined products and, for countries that have refineries such as Côte d’Ivoire, on crude oil. Africa is a hive of activity for hydrocarbon exploration and development and, with the major multinationals heavily involved, there is significant demand for lending, payment and cash management services.
The commodity finance business in the group is headed by Sidoine Viagbo, who sits in the bank’s Abidjan office. His team’s key clients are multinationals and trading houses (such as Cargill, Louis Dreyfus, Trafigura and Vitol), as well as large local corporates. In 2017 Ecobank financed over US$700mn worth of cocoa and cotton in West and Central Africa and the bank aims to boost its market share of mainstay soft commodities like cocoa, cotton, tea and cashews.
Ecobank has become an integral part of the commodity financing community rather than just a cog in the African network. The bank’s financing is highly structured and is based on ensuring automatic repayment of the advances from cash flows generated from the commodities being traded. Using structuring techniques Ecobank can control its level of risk and maintain control over the flows of commodities and financing through the value chain.
EBISA has become a leading trade finance and payments provider for African currencies and trade
Ecobank has established itself as the premier forex platform for African trade and payments. Despite the challenging economic environment of recent years, which witnessed a slowdown in African growth under the double whammy of weak commodity prices and depreciating currencies, EBISA’s forex platform has maintained its number one ranking on most of the 25+ African currencies traded. EBISA is the only bank to trade all Middle Africa’s 16 currencies, as well as many of those used by the continent’s key trade partners. EBISA has established itself as a major provider of currencies to NGOs, corporates, development finance institutions and other financial organisations seeking access to African trade and using Ecobank’s pan-African network to get payments ‘the last mile’.
EBISA has multiple ambitions. It is seeking to widen its distribution network to include international non-bank financial institutions looking for exposure to African assets. And it is strengthening its relationships with private equity and debt investors by providing access to its local knowledge network. EBISA’s ultimate goal is to become the one-stop shop for African currency and trade, taking African risk and distributing it to the international market.
Ecobank’s trade finance team
- Ehouman Kassi, Group Head of Trade, firstname.lastname@example.org
- Massetou Diaby Traoré, Head of Trade Finance (International), email@example.com
- Julie Coulon, Head of Structured Trade & Commodity Finance (EBISA), firstname.lastname@example.org
- Sidoine Viagbo, Head of Structured Trade & Commodity Finance (ETI), email@example.com
- Frederick Seidu, Head of Trade Service & Sales, firstname.lastname@example.org