South African bank set to dominate Nigerian banking sector
After dominating Nigeria’s telecom and pay-TV sectors, South African leading lender, the Barclays Africa Group, has announced plans to make a grand entry into Nigeria’s banking industry seeking to increase her market share in Africa.
FINANCIAL WATCH gathered that the Barclays Africa Group which signified its intention to look towards Nigeria as a new market in order to dominate the African banking market may be reeling out strategies to acquire one of Nigeria’s Tier2 banks.
The planned entry which was made public last week by Barclays Africa group has been described by industry watchers as a welcome development.
During a presentation in South Africa, Maria Ramos, the chief executive of Barclays Africa, said the lender aims to enter Nigeria as a new market, as it seeks to raise its share of the African banking market to 12 per cent from 6 per cent over the medium term.
The south African bank currently seating on number two spot by market value reported a 4 per cent rise in annual profit, thanks to a substantial decline in impairments, normalised diluted headline EPS, the primary measure of profit in South Africa that strips out one-off items, came in at 1,837.7 cents in the year ended December, compared with 1,769.4 a year earlier.
Barclays Africa Group Limited is 14.9 percent owned by Barclays Bank PLC and is listed on the Johannesburg Stock Exchange with current operations in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda, and Zambia.
A top banker in one of the Tier 2 banks in the country said the Barclays Africa Group have been speaking with some banks in the country with the view of acquiring one with a strong corporate governance structure.
The source, who declined to name the banks, said naming the banks speaking with Barclays Group may interfere with the discussions that are ongoing.
“Barclays have been speaking with some banks for more than a year now and there are indications that the group will come up with their choice very soon. One thing that is certain here is that good corporate governance structure will be criteria for the acquisition” our source said.
Anor Anyanwu, former Executive Director of Mainstreet Bank, said the planned fresh entry of Barclays Group in to the country will serve as re-entrance for the group as Barclays had recorded giant strides the last time it was here.
“The Union Bank we have today was formerly Barclays Bank. If the group is planning a fresh entry into the country, I will say it is a welcome development. It also a pointer to the fact that companies outside the country are beginning to see Nigeria as a good place to do business”, Anyanwu stated.
Cyril Ampka, an Abuja-based economist, said the move will once again move Nigeria up on the list of countries with ease of doing business.
His words: “We have been clamouring for investors to come into the country and this is one of such responses. Coming into Nigeria by Barclays Africa is an indication that Nigeria is ready for international business and I am sure that the CBN will welcome them into the country after meeting the requirement set by the apex bank”.