Friday, June 11, 2010

Ecobank 2010 AGM

Ecobank a Togolese based banking conglomerate makes history today by having its 22nd annual shareholders general meeting, not in Togo or Accra where it is listed, but in Kenya. Why Kenya? While it has presence in over 30 African countries, in 2008 they completed a buyout of a homegrown financial institution that has been known as East African Building Society, and which is now known as Ecobank Kenya from which they will base their ambitious regional plans.

As with exposure to Ugandan investment sector, Ecobank brings an awareness of practices of and levels of disclosure for Kenyan companies that have engaged in cross listing on exchanges in Uganda and Tanzania.

• Looking at the AGM notice for Ecobank which has 180,000 shareholders, it encourages shareholders to sign their proxies and vote even if they don’t plan to attend the AGM with for/against/abstain boxes to tick.
• Notice figures are quoted in US$ [profit of $62.9 million and a dividend of $29.7 equivalent to $0.3 per share]. [At the end of 2009, Ecobank has assets of $9 billion, while Kenya it was the 19th largest bank by the same measure with asset of Kshs 13.95 billion, ($186millin) and made a loss of 1.15 billion ($15 million) after making heavy provisions in a one time effort to clean up their old loan book]
• Approval of director’s remuneration is something glossed over in Kenya and approved without scrutiny or number, perhaps referred to in the footnotes. Ecobank lists the packages availed to directors that are being voted on [chairman $50,000, other board member $30,000 and all get two first class air tickets to Europe]
• There is follow-up to previous shareholder resolutions: It notes that shareholders had approved capital to be raise of $3 billion, by a rights issue - but that so far only $778 million has been raised and asks shareholders to re-affirm the decision and allow the board continue to raise funds by various means.
• Audit firm of Pricewaterhousecoopers (PWC) are re-appointed as joint auditors comprising teams from PWC ivory coast and PWC Nigeria
• Directors being co-opted to the board have their (extensive) CV’s - two in this case, and both are under 50 years.

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