Nigeria's stock market regulator, today, said said it has suspended Ecobank from all capital market activities because of irregularities surrounding a loan.

The Securities and Exchange Commission (SEC) said an Ecobank client Arian Capital Management had used capital from another company without that company's permission as collateral for a loan from Ecobank. After suspending Arian, the SEC said it had asked Ecobank for an explanation but the bank did not reply.

"The suspension is as a result of the role played by the bank in a complaint by Avil Services Ltd relating to a margin loan transaction with Arian Capital Management Ltd," the SEC statement said.
The SEC statement said Arian had taken shares belonging to Avil Services LTD and used them as collateral for an Ecobank margin loan facility without Avil's permission, withholding the shares and accruals from Avil.

"The SEC ... requested further explanation from Ecobank Nigeria Plc. This explanation is yet to come from Ecobank Nigeria Plc despite repeated demands for it," the statement said.
 
"The suspension will continue to be in force until the bank clears all the issues," it added

Responding to the development, spokeswoman for Ecobank Nigeria Adenike Laoye said the Pan-African lender's suspension from capital market operations would not affect its business, because that subsidiary does not itself deal in capital markets. The bank takes payments for retail participation in initial public offerings (IPOs), but does not deal in the secondary market. She also said the Togo-based bank's Nigerian capital markets arm, ESL Securities Limited, does deal in the markets but is not covered by the ban

Pan-African banking group Ecobank has a presence in 32 African countries and around 9.4 million customers, although its operation in Nigeria, Africa's second biggest economy, makes up the lion's share of its business. The bank has its headquarters in Togo in west Africa.