Ecobank: Low oil price could impact on the results in 2015

Essien-AlbertThe low oil prices in the international market could negatively impact on the results of Ecobank in 2015 according to the CEO of the Pan African banking group ETI, Albert Essien, who announced the information in an interview to Reuters in London on the 14th January.

Oil prices, which have fallen about 60% since June 2014, have caused great difficulties for African countries, whose economies are heavily dependent on the oil exports like Nigeria, Angola and Ghana. “If the markets where we operate suffer from certain shocks, there will be a ripple effect on our business,” said Mr. Essien.

“In 2014 we have not seen a real negative effect. But as we slip further down and the price gets stuck, we believe that we could have some challenges” Essien told Reuters.

In the third quarters of 2014, Ecobank has generated 43 percent of its net revenue in Nigeria, Africa’s biggest oil exporter.

The CEO of Ecobank, moreover said that his business is now focused on improving the profitability of its various activities after a period of rapid expansion. He said the bank’s cost-income ratio is expected to fall below 60% in 2015 and 55% in 2017 after reaching 66.6% at the end of the third quarter of last year.

The negative effect could come from a loss in business in general, but also more specifically lost opportunities in upstream oil business, said Essien, adding that, the bank was stress testing for the impact of oil trading at $40 a barrel.

About Khalid Al Mouahidi 4433 Articles
Khalid Al Mouahidi : A binational from the US and Morocco, Khalid El Mouahidi has worked for several american companies in the Maghreb Region and is currently based in Casablanca, where he is doing consulting jobs for major international companies . Khalid writes analytical pieces about economic ties between the Maghreb and the Mena Region, where he has an extensive network