African Banker’s World.
BIO’s first investment in Mozambique
BIO (the Belgian Investment Company for Developing Countries) has
granted a $15m senior loan to Mozambique’s Banco Comercial e de
BCI Bell Canada International
). The loan has been extended in local currency
through a swap with
TCX Twin Cities Experience
TCX Turbo Cad Drawing as Text
, and will be used by BCI for on-lending to
SMEs. This is the first sizeable local currency transaction by a foreign
lender, and also BIO’s first investment in Mozambique.
BIO’s loan will enable BCI to provide loans in local currency
with longer tenors to 15-20 SMEs. It also demonstrates the viability of
longterm local currency financing from foreign sources, increasing
access to financing by SMEs. This project is in line with BIO’s
strategy of supporting private banks that contribute to the enhancement
of financial inclusion in developing countries through the financing of
$225m for infrastructure
FCMB and Stanbic
signed a $225m Syndicated Medium Term facility to
be used towards refinancing the $55m debt secured for the Akwa Ibom gas
pipeline project, with the balance of $170m for part financing the cost
of expanding its gas processing facilities and building a new gas
pipeline to supply gas to the Calabar
NIPP National Institute for Plant Protection
NIPP National Institute of Public Policy
power plant. FBN Capital
acted as the Global Coordinator Bank, Financial Modelling Bank while
UBA, First Bank of Nigeria, Stanbic IBTC and FCMB jointly acted as
Mandated Lead Arrangers. Mrs Bashirat Odunewu of First Bank said the
project aligned with the government vision for harnessing gas reserves
and developing domestic infrastructure.
First prepaid card
The UBA Prepaid Card, the first of its kind in the industry, is not
linked to any bank account and therefore attracts no minimum balance.
Available in Nigeria and 18 African countries where UBA has a presence,
it can be used at all Visa acceptance points, over 1m ATMs and 30m
POS/merchant terminals in over 179 countries. Customers who cannot get
approval for a current account can use it for access to financial
services and banked customers can use the prepaid card to manage their
spend up to what they have loaded on the card and limit their account
New financial services product
Dassault Systemes, the French product design software provider, has
launched its first product for the financial services sector. Its
Product Innovation Factory aims to make it easier for financial service
providers to create new products and change existing ones to meet
customer and regulatory demands. Kevin Pleiter, VP Financial and
Business Services Industry, says it allows financial services companies
to develop, manage and organise complex product details in real time,
from anywhere and with full control. Dassault Systemes estimate that it
can increase efficiency by 20%-30% by reducing the time spent
collecting, organising and validating data.
Development bank mooted
The Brics Summit in Durban – for members Brazil, Russia, India,
China and South Africa – agreed in principle to launch a development
bank and create a fund for contingency reserve arrangement to tackle any
emergency financial crisis in member countries. The World Bank has
declared its readiness to support it. However, agreement is still to be
reached on the size of the fund and how much each country will
Nigeria’s Zenith Bank has listed $850m shares as Global
Depository Receipts (
See Global Depositary Receipt (GDR).
) on the
London Stock Exchange
. The lender has a
primary listing in Nigeria with a market capitalisation of over $4bn.
Zenith Bank joins three other Nigerian lenders with GDRs trading in
London – Guaranty Trust Bank, Diamond Bank and First Bank. The LSE
expects an increase in new listings from African companies this year.
Guinea t o open exchange Guinea plans to open a stock exchange in the
next two years, aimed at generating funding for the mining sector, and
planned to start with a maximum of 10 companies, mainly from the mining
sector as well as industrial firms and banks, its central bank director
of lending said.
Ghana’s small cap market The Ghana Stock Exchange is starting
a parallel market for small companies. Businesses with a minimum capital
of $132,000, at least 20 shareholders and one year of published accounts
will qualify to list on the Ghana Alternative Market. It will start a
revolving fund to cover listing costs. The African Development Bank has
contributed $600,000, Ghana’s Venture Capital Trust Fund is giving
$500,000 and the exchange $50,000.
Kenya small market gem
Kenya’s new small and midcap market, the Growth Enterprise
Market Segment (GEMS), makes it possible for small companies to list on
. Kenya’s economy relies on small business for 40% of its
(guanosine diphosphate): see guanine.
. Companies need to show accounts for one year, which need not
be profitable, need only enough working capital for a year, can list as
little as 15% of their company and have only 25 shareholders. Companies
can be incorporated abroad so long as they register in Kenya.
Mobile trading on ZSE
Econet Wireless Zimbabwe is setting up a payment system for small
value shares bought on the
Zimbabwe Stock Exchange
using its mobile
phone-based money transfer facility, EcoCash, designed to make it
possible for small investors to buy and sell shares using an electronic
trading platform, making trading more transparent. The EcoCash system
now has more than 1.7m subscribers: Econet Wireless has more than 8m
clients using its mobile phone network.
Nigeria SEC signs Oman MoU
The Securities and Exchange Commission (SEC) signed a
(MoU) with the Capital Market Authority (
) of Oman. The
MoU specifies the framework for bilateral cooperation in matters
relating to securities market development, oversight and regulation.
See exchange-traded fund (ETF).
in New York
Global X listed the first exchangetraded fund (ETF) on the
tracking Nigerian stocks, enabling US investors to buy
high-growth Nigerian shares. The Nigeria ETF starts at $1.5m, the
Angola se t f or 2015
Set to open in 2015, Angola expects its stock exchange to have a
market value of 10% of GDP, and a capitalisation of $11bn, making it
Africa’s sixth biggest.
New SME f und
Private equity firm
Any of several tropical water birds of the family Jacanidae, having long toes adapted for walking on floating vegetation. Also called lily-trotter.
will merge with Kenya-based InReturn
Capital and raise a new $75m fund to invest $1m to $5m in each target
company in at least eight African nations.
Nigeria i s banking on Facebook
Leading Nigerian lender Guaranty Trust Bank (GTB) has launched a
‘Social Banking’ service on Facebook.
Managing Director and Chief Executive Officer Segun Agbaje said the
new service is the first of its kind in the Nigerian banking industry
and will enable the public to commence a banking relationship and
perform transactions 24/7, safely and conveniently, without having to
leave the platform.
The bank recently introduced GTBank Mobile Money, a secure
application that allows customers and non-customers to perform transfers
and payments from their mobile phones to any mobile phone subscriber
within the country
Stanbic – banking with heart
Stanbic Bank launched its Heartland Banking, a new product that
enables people in the African diaspora to bank and accumulate wealth in
their home country. Heartland Banking targets the 1.3m citizens of
Nigeria, Ghana and Kenya who are resident in the UK. Its unique feature
is that transactions can be conducted in a person’s country of
origin, in their local currency. The Heartland current account offers
basic remittance services and customers who already have UK-based bank
accounts can transfer money into their Stanbic Bank Heartland current
account by adding the account as a beneficiary on internet banking.
New investment in the Nigerian bond market may reach $1.5bn by mid
2013, further boosted after UK-based Barclays Bank added the Nigerian
paper to its local-currency government bond index. In October 2012,
Nigeria was included for the first time on JP Morgan’s emerging
market Government Bond Index.
local currency bond
The IFC will float $50m in nairadenominated five-year bonds in a
move to boost Nigerian capital markets and finance the
organisation’s local operations. The IFC has a portfolio worth
$1.1bn in Nigeria, its largest in Africa and eighth-largest worldwide.
Angola’s Eurobond debut
Angola plans to raise $1bn from a debut Eurobond issue this year.
Low yields on developed-market bonds have led investors to look further
afield to achieve returns, providing opportunities for frontier
economies to borrow cheaply from international capital markets: Zambia
made its Eurobond debut in September with a $750m issue that was 15
times oversubscribed. Angola’s growth in 2012 was 7.4%, and the
government expects it to be 7.1% in 2013.
Djibouti plans finance training
Djibouti plans to establish an Islamic finance institute where
students will study Islamic finance. Courses are already available at
the University of Djibouti. Islamic banking has doubled in Djibouti,
which started to develop an Islamic finance industry five years ago, and
completed its legal and regulatory framework to accommodate Islamic
banks last year.
Egypt passes sukuk law
Egypt’s parliament has passed the country’s first law
allowing the issuance of sukuk, raising the prospect of a debut
sovereign deal in the near future.
Islamic finance investment
IFC has invested $5m – 15% – equity in Kenya’s Gulf African
Bank to support corporate finance and lending to small and medium
businesses in East Africa, its first engagement with an Islamic finance
institution in sub-Saharan Africa.
The bank, one of Kenya’s only two Islamic banks, has 14
Kenya. It will use IFC’s financing to increase finance for
retail and corporate customers, develop programmes for women
entrepreneurs and extend more services to small and medium businesses. A
further $3m trade line will be made available to Gulf African Bank under
IFC’s Global Trade Finance Programme.
Nigerian deals surge
The total value of M&A deals recorded in Nigeria for 2012
surged by 379% to $7.415bn, compared to the $1.548bn recorded in 2011.
The oil and gas sector accounted for 77%, up from 62%. The consumer
market dropped by 6% from 16% in 2011.
Bankers target Africa
Global financial advisory and asset management company Lazard set
up a team of a dozen bankers headed by Matthieu Pigasse dedicated to
mergers in Africa. Banks including Citigroup, Barclays and Standard
Chartered are also expanding their presence. Investment banking fees in
the region totalled $305m in 2012.
Heritage Bank opens Heritage Bank, formerly Societe Generale Bank,
has commenced commercial banking in Nigeria with $131m initial capital
base. The bank, which began operations with three branches, is offering
full commercial services under a regional bank status.
First US bank f or Ghana
US Citi Bank will enter Ghana’s banking sector when it obtains
a full banking licence. The bank, which has operations in 16 African
countries, will be the first US bank in Ghana.
Nigeria plans increase
Nigeria plans to increase its
sovereign wealth fund
$5bn within three years. Currently Africa accounts for 14 SWFs with a
total amount of $114bn in 2009, representing 3% of global SWFs.
StanChart boosts Zambian SMEs
Standard Chartered plans to inject $300m to support the growth of
SMEs in Zambia. The bank said SME banking was key in its financial
performance as it contributed about 40% of the consumer banking revenues
and had shown year-on-year asset growth of 14%.
Old Mutual expands
Anglo-South African insurer Old Mutual is setting aside $560m to
fund expansion in sub-Saharan Africa. It plans to buy minority and
majority stakes in businesses in East and West Africa over the next
three to five years.
The company, which reported higher-than-expected profit, sees
growing demand for insurance across the region as rapid economic growth
increases consumer spending. Africa’s economic output is forecast
to have quadrupled to $2 trillion between 2000 and 2012.
France looks t o Africa
BNP Paribas, France’s No.1 listed bank, plans to boost its
investment footprint in Africa as it favours promising growth markets
away from the riskier
same as Euroland
n → ,
. “Africa will be a growing area for
business and we will invest cautiously to seize opportunities,” the
Kenya raises deposit cover
A revised deposit insurance scheme will begin in July to replace
the 23-year-old present Deposit Protection Fund under Banking Act. The
new scheme seeks to, among other reforms, review upwards the deposit
insurance coverage from the present maximum of about $1,166 paid to
savers upon collapse of their financial institution. The reforms, the
Central Bank said, will align the new deposit scheme to international
best practices. With the compensation cap set to rise, it’s likely
contributions from deposit-taking institutions will equally be raised.
Standard Chartered is relocating its African business to
Johannesburg from Dubai to take advantage of higher growth rates on the
continent. Private equity, transaction banking and project finance teams
have already moved. The bank’s income from Africa rose 15% last
year to $1.59bn, with 10 countries posting growth of more than 10%,
including Kenya, 34% and South Africa, 28%. With operations in 16
African countries, it plans to invest $100m over the next three years
opening 110 branches on the continent and recruiting 950
consumer-banking staff. Revenue from Africa made up more than 8% of
income last year.
Copyright IC Publications 2013
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