Pan-African conglomerate Ecobank is reporting a significant increase in the value of letter of credit (L/C) business it is writing as it focuses on what its CEO describes as the group's "intent to be the preferred trade bank for sub-Saharan Africa".

Addressing Ecobank Transnational Incorporated's annual general meeting, Ade Ayeyemi added that the bank's focus on trade makes it "a key player in helping Africa's businesses and economies to maximise the huge opportunities created by the African Continental Free Trade Area (AfCFTA)."

Established in 2018, the AfCFTA free trade covering most of Africa took a major step towards its objective with the launch in January 2022 of the Pan-African Payments and Settlements System, which allows payments among companies operating in Africa to be made in any local currency.

Growing L/C business

The total value of L/Cs issued by Ecobank across its 15 affiliates in West Africa grew by 61 per cent in 2021 to US$2.7 billion.

The bank's African operations benefitted from their ability to leverage its Paris-based affiliate, Ecobank International, for L/C confirmations, payments, and discounts in favour of beneficiaries.

L/C market penetration

Ecobank was awarded Best Trade Finance Bank in West Africa at the GTR 2022 Leaders in Trade awards in recognition of its trade services as well as its domestic and regional supply chain financing across key trade corridors. The judges also recognised the bank's command of a significant market share of L/C business across the continent.

Ecobank's footprint spans 33 African countries while the group has a banking licence in France and representative offices in Addis Ababa, Johannesburg, South Africa, Beijing, London and Dubai.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.