By David Dolan
Absa, the South African bank majority owned by Britain's Barclays, is looking for an acquisition in Nigeria but has no specific targets, its chief executive told Reuters on Sunday.
"Nigeria is a very attractive, very important market. It's a very large economy, so yes, I think we continue to be interested in Nigeria," Maria Ramos said in an interview during the Fortune Global Forum in Cape Town.
Asked if the bank had any concrete plans for an acquisition now, Ramos said: "No, but we're constantly on the lookout."
Nigeria's central bank rescued nine institutions last year with a $4 billion bailout, but the oil-producing West African nation -- Africa's most populous -- is still a highly attractive frontier market given its growth potential.
Banks from South Africa and other emerging markets are keen to push into Nigeria as most of its 140 million people are without bank accounts.
South African banks avoided the worst of the global credit crisis due in part to strict supervision, but have since been hit by rising bad debts as customers struggle to pay back loans.
Africa's biggest economy exited its first recession in 17 years last year, and banks are expected to post muted growth this year due to high employment and debt levels.
CHALLENGING YEAR
"This will remain a challenging year from a credit growth point of view as people consolidate their own balance sheets (and) pay off debts," Ramos said.
The euro zone debt crisis is also likely to put a strain on the recovery of Europe, Africa's top trading partner, she said.
Absa, South Africa's biggest mortgage lender, said in February it expected impairments, or bad debts, to improve in 2010.
"We did see an improved situation for this year and that certainly has been the case compared to last year... On the retail side of business, we've started to see that improvement come through."
Absa said in March its investment banking arm would provide products and services to the South African clients of Japan's Sumitomo Mitsui Financial Group, and the two would explore other joint business opportunities.
But Ramos also said Absa was not considering expanding its alliance with Japan's third-biggest bank at the moment.
Sumitomo Mitsui has a 2 percent stake in Barclays, which owns 55 percent of Absa.
"It is mostly because of that tie-up with (Barclays). We're hoping to be able to service their clients in South Africa ... and we think that's an important part of the relationship," she said.
Reuters |