Barclays Bank to return to Nigeria after 35 years exit. ...from Colonila Bank to Barclays Bank, then to Union Bank. Barclays Africa wants to expand its corporate investment banking business in Nigeria into a fully fledged business by 2016. Barclays already has a representative office in Nigeria and has been flying investment bankers in and out of the country to get business. Stephen van Coller, CEO of Barclays Africa corporate and investment banking, said it would probably be a 2016 strategy…. A licence is the easy way to go. But on an inorganic ( acquisition) basis, the question is: can you find a business that meets your strategy? Of South Africa’s four major banks, Standard Bank is the only one with retail, business, corporate and investment banking operations in Nigeria. FirstRand’s Rand Merchant Bank was awarded a merchant banking licence by the Nigerian authorities in 2012. Most of the banking businesses in the other African operations were more focused on retail and business banking, Mr van Coller said. More needed to be done to build strong corporate and investment banking services in these countries. The bank was pitching in by hiring more investment bankers in the rest of Africa, and investing more in information technology options such as trading platforms. Barclays Africa CEO,Ms Maria Ramos said the strategy in Nigeria would not follow the route the bank had taken in other countries. We are not going to be doing retail, that’s not been the way we have looked at it (Nigeria) before. It’s primarily from a corporate (banking) point of view, she said. Adrian Cloete, a portfolio manager at PSG, said it made sense to approach Nigeria through corporate and investment banking as Barclays Africa already had good, profitable retail banking operations on the rest of the continent.I think building a corporate and investment banking (business) is lower risk because to build a retail branch network in Nigeria you need good deposits … (but) you can make more money on corporates.It can be a less capital-intensive business, Mr Cloete said, referring to the advisory role of corporate and investment banking. For those of us who are older, it can recal that one of Nigeria’s oldest banks Colonial Bank was founded in 1917 but in 1925, Barclays Bank acquired it changing the banks name to Barclays Bank (Dominion, Colonial and Overseas) .In 1969, Barclays Bank DCO was incorporated in Nigeria, as Barclays Bank of Nigeria Limited, to comply with new banking laws enacted in 1968. In 1971, the shares of the bank stock were listed on the Nigerian Stock Exchange and 8.33% of its shares offered to Nigerians. In 1972 the Federal Government of Nigeria acquired 51.67% ownership of the bank, leaving Barclays Bank Plc. of London with 40% ownership and in 1979, that 40% was sold to Nigerian individuals and businesses to comply with then enacted banking and investment laws. The bank changed its name to Union Bank of Nigeria Plc. Interestingly, when Unions Bank ran into murky waters and needed recapitalization few years ago, guess who came to its rescue, Bob Diamond, former CEO of Barclays Bank, UK, and he acquired 9.1 percent of shares of Union Bank of Nigeria plc through Atlas Mara, his investment company. This is following his acquisition of sub-Saharan African bank ABC Holdings Limited (BancABC) and ADC African Development Corporation AG, to the tune of $265 million in the first acquisition by his investment company. The ADC, which trades in Frankfurt, owns 9.1 percent of Union Bank of Nigeria and 47.1 percent of BancABC which offers financial services in Bostwana, Mozambique, Tanzania, Zambia and Zimbabwe. Whether Barclays will make an impact in Nigeria’s highly competitive banking industry is left to be seen.
Posted on: Thu, 07 Aug 2014 11:47:29 +0000
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