Leading South Africa lender, Absa, has revealed that it will make a start on its investment bank-focused expansion into Nigeria in the second half of this year as part of its growth strategy.
Charles Russon, chief executive of the division, said the bank will not buy a Nigerian bank but will rather make an entry into the country slowly and grow organically, noting that Absa will leverage on Nigeria’s huge unbanked population, estimated at 60 million by the World Bank in 2017.
Absa expressed its desire to double its share of banking revenues on the continent to 12 percent and one of a series of ambitious targets Absa has set as it tries to carve out a name for itself after separating from Britain’s Barclays in 2017 was to commence operations in Nigeria, Africa’s most populous nation.
Russon also revealed that Absa’s Nigerian expansion would be focused on its corporate and investment bank (CIB) and has requested his team to develop a strategy within the coming months.
“I want the strategy nailed down and approved with our board pretty much at the end of Q2 so that we can start to act on that in the second half,” Russon told Reuters.
Speaking on the sidelines of the World Economic Forum in Davos early this year, Maria Ramos, former CEO of Absa, said the bank was unlikely to make acquisitions but it would have to be clear on how to fund its activities without a retail deposit base, adding that building from scratch could be slow.
Absa is also setting up offices in London and New York, both with securities licences, to replace some of the global reaches it lost with the Barclays divorce. Both should be up and running by around the third quarter, Russon said, adding similar operations in other regions could follow.
Amalgamated Banks of South Africa Limited (Absa) was formed in 1991 through the merger of UBS Holdings, the Allied and Volkskas Groups, and certain interests of the Sage Group. In 1992 Absa acquired the entire shareholding of the Bankorp Group (which included TrustBank, Senbank, and Bankfin), thereby extending its asset base even further.
In 1997 the name of the holding company, Amalgamated Banks of South Africa Limited, was changed to Absa Group Limited, consisting of three main operating divisions. In 1998 the United, Volkskas, Allied and TrustBank brands were consolidated into a single brand, and Absa adopted a new corporate identity.
OLUFIKAYO OWOEYE
