Absa is looking to expand its presence in Nigeria, adding Africa\u2019s most populous nation to its push to diversify beyond its biggest markets.<\/p>\n\n\n\n
South Africa\u2019s third-biggest lender is planning to convert its representative office into a merchant bank in a move designed to diversify its earnings away from the lender\u2019s key markets of South Africa, Kenya and Ghana, which accounted for more than 80% of profit in the six months to June. <\/p>\n\n\n\n
\u201cWe\u2019ve got a rep office in Nigeria, which we are exploring the possibilities of converting into a merchant banking license,\u201d the bank\u2019s Chief Executive Officer, Kenny Fihla, said in an interview with Bloomberg TV.<\/p>\n\n\n\n
Nigeria has become increasingly compelling for institutional lenders after President Bola Tinubu began taking moves to lure investors and accelerate growth. <\/p>\n\n\n\n
A merchant banking license would allow Absa to take corporate deposits and offer loans, investment banking and project finance.\u00a0<\/p>\n\n\n\n
The move would bring Absa into competition with its larger South Africa-based rivals Standard Bank, and FirstRand, as well as Nigeria\u2019s own Access, Zenith, and First Bank of Nigeria.<\/p>\n\n\n\n
\u201cThe dependence on two or three big markets is fine if you\u2019ve got tailwinds, but as soon as you experience some headwinds, you are vulnerable to massive shocks,\u201d Fihla said. <\/p>\n\n\n\n
\u201cWhich is why then the primary thrust of our strategy is to diversify our revenue streams, both in terms of geographies, in terms of business lines, but also in terms of client segments.\u201d<\/p>\n\n\n\n
Meanwhile, in Kenya, the bank raised its stake in a local unit to 72%, less than the 85% it had targeted.<\/p>\n\n\n\n
\u201cOver the next couple of years, when the time is right, we will try to increase further,\u201d Absa\u2019s Group Executive for Africa regions Charles Russon said in a separate interview. <\/p>\n\n\n\n
\u201cIdeally, we would like to have as big a position as possible.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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