Absa’s Deputy CEO Louis von Zeuner said that Absa was applying for a representative office licence in Nigeria. Mr. Zeuner said this at an exhibition for the financial services group’s clients yesterday.

According to Absa’s Deputy CEO, international opportunities have opened up after UK-based Barclays bought a 51% stake in Absa. Barclays has been driving business to Absa and vice versa.

Competitor banking group FirstRand said on Tuesday that it was keen to enter the Nigerian banking market and that FirstRand had received conditional approval for an office in Nigeria. FirstRand’s CEO-designate Sizwe Nxasana said that the bank would wait for a second phase of consolidation among Nigerian banks before entering the market.

With the poor economic growth potential of developed countries and South Africa in the wake of the global financial crisis, local banks have realigned their strategies to focus more on faster growing African markets, even though the financial crisis has manifested itself in weaker gross domestic products (GDPs) and currency devaluations in African countries. Nigeria is Africa’s second largest economy. Consolidation between 2003 and 2007 cut the number of Nigerian banks from 80 to 25 and there has been speculation that this number may fall to 15.

The Central Bank of Nigeria (CBN) rescued five banks in a NGN2.6 billion bailout last month, after the regulator said lax governance left the institutions weakly capitalized and a threat to banking systems. The move was applauded by analysts but also introduced uncertainty into Nigeria’s banking market.

Standard Bank, which has been focusing on growing its footprint in Africa for about two decades and has operations in 17 countries, said in July that it also intended to grow its position in Nigeria. Standard Bank said GDP in Nigeria was expected to grow 4-5% this year.

Nedbank has a strategic business co-operation relationship with Ecobank Transnational Incorporated (ETI), parent company of Ecobank, for a combined pan-African banking network covering 30 countries. Ecobank operates in 25 countries, including Nigeria, while Nedbank operates in five sub-Saharan countries.

Absa CEO Maria Ramos said at the exhibition yesterday that the severity of the effect of the global financial crisis had been unexpected. According to Maria Ramos, the crisis represented an opportunity for businesses to reach out to one another and usher in new ways of doing business. Absa’s global reach through its partnership with Barclays provided a solid platform to provide solutions to businesses in an increasingly complex and challenging external environment, Ms. Ramos said.

Louis Von Zeuner said the business landscape is rapidly changing and banking services had to do the same. He gave an example of Absa’s microfinancing business, which had attracted 13,000 customers in KwaZulu-Natal, 80% of whom were women.

Read more on Banking in Nigeria or South Africa

Absa | Central Bank of Nigeria (CBN) | Ecobank | FirstRand | Nedbank | Standard Bank

Source(s): Business Day