South Africa’s Nedbank has announced its acquisition of a 20% stake in Togo’s pan-African lender Ecobank Transnational for $493m, bringing its share in line with Qatar National Bank (QNB), which earlier acquired a 23.5% holding that will now be pared back to an equal fifth.

QNB invested in Ecobank in a flurry of deals, worth $223m and $283m, to raise its stake first to 12.5% and then to 23.5%, as the Qatari bank also trumpeted plans to expand significantly into the African market to become the top bank in the Middle East and Africa by 2017.

Nedbank is paying $493.4m for 4.5 billion new Ecobank shares, cashing in a stock option that values Ecobank at $0.1093 a share with a 4% discount the lender’s September price on the Nigerian Stock Exchange.

Majority-owned by British insurer Old Mutual, Nedbank gained the right to buy the stake under the terms of a 2011 loan to Ecobank, but a corporate governance crisis that led to the departure of Ecobank’s CEO raised doubts over whether the deal would go through.

However, Ecobank CEO Albert Essien did hint that the deal would pull through in September as he reassured shareholders that QNB would not be launching a takeover bid, and that QNB’s stake would subsequently be reduced to 20% by an acquisition by the South African bank.

QNB raises Ecobank stake to become largest shareholder

With the investment into Togo-based Ecobank by both QNB and Nedbank and the likely instalment of fresh expertise from both lenders onto its board, the direction that Ecobank now heads in will likely be interest to both investors and the bank’s market competitors.

For Nedbank the acquisition gives it access beyond South Africa, where it is the fourth-largest lender, and on into fast-growing markets in Sub-Saharan Africa where it was lagging.

“This could be very complementary to Nedbank. QNB is from the Gulf. Nedbank is from the south. It could help the institution to grow stronger,” Essien told the Financial Times.

Togo-based Ecobank has a presence in nearly 40 sub-Saharan countries and is particularly strong in West African, particularly in Nigeria where it has strong ATM and branch presence.

Nevertheless, shares in Nedbank fell 1.8% to 214 rand on news of the deal, over investor worries that the lender was paying over the odds for the shares, in spite of its preferential discount.

Qatar National Bank acquires 12.5% stake in Africa’s Ecobank