• Thursday, May 30, 2024
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Nigeria leads in African syndicated loans market


Nigeria’s borrowers have led the way in Africa’s syndicated loan market so far this year, with more than $10 billion of deals signed or about to be concluded, with Citibank being a major player in most of the deals.

“We have led or have been involved in a majority of those deals,”Citibank’s Managing Director and Chief Executive Officer (CEO) for Nigeria, Omar Hafeez tells BusinessDay, in an exclusive interview.

“A major role we play for our clients is access to capital and as our clients become larger and larger, I think Citi has been able to bring that capability to play in terms of when you look at the Nigerian market over the past 24 months and see who has brought the largest amount of capital to the table,” Hafeez said.

MTN Nigeria recently raised a $3 billion loan to expand its network through Guaranty Trust Bank and other lenders including Citigroup, while Fidelity

Bank recently agreed an oversubscribed $100 million debut deal through co-ordinators Citigroup and HSBC.

“We also did quite a bit of work around Mergers and Acquisition (M&A) activity, such as in the recent consolidation exercise, where we were the advisor of Access Bank in the acquisition of Intercontinental,” Hafeez said.

“Citi is also one of the banks that are advising AMCON on what to do with the three bridge banks.”

Africa is one of the largest franchises for Citi Bank and the largest two in Africa are South Africa and Nigeria.

“Nigeria is a very important franchise for us,” Hafeez said.

“Citigroup is in over 100 countries, and what it has done is to categorise countries around the world in various markets with the top markets being those countries that Citi wants to invest in to grow, and those market are referred to as –invest to grow markets-,Nigeria is firmly in that category,” Hafeez said.

Hafeez says Citi is seeing continued opportunity for it in the Oil and Gas, capital raising activity by Nigerian Banks, and the manufacturing sector, as the country’s economy continues to expand.

“Our clients are local corporates who are upscaling; they could be in the FMCG space, manufacturing, or services. FMCG it’s a vast area because of the demographics, so you have people that manufacture juices or consumer goods, again a big part of our business,” Hafeez said.

“The banks themselves can also be considered as our clients as well, so you would see capital raising for banks in which we have played a big role.”

Citi recently announced first quarter 2013 earnings that beat analysts’ estimates with both NIM expansion and higher revenues.

Revenue climbed to $20.5 billion from $19.4 billion in the same quarter last year and was $20.8 billion excluding accounting adjustments.

Citi’s first-quarter return on assets (ROA) improved to 86 bps in 1Q’13, up significantly from 45 bps last quarter.

Earnings increased sequentially, mainly due to seasonally strong results in fixed income and a healthy loan loss reserve release.

By business line, Global Consumer Banking net income advanced 12 percent supported by lower operating and provision expenses, partially offset by slowing mortgage refinancing activity in North America.

Loan loss releases in North America were offset by some modest reserve builds in International Consumer Banking reflecting portfolio growth.

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions.

Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.