| Thu 25 Nov 2004, 11:51 | | Absa close to bagging Angolan bank |
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Absa close to bagging Angolan bank
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Financial Services Editor
ABSA is close to finalising the purchase of a stake in a bank in Angola, as it moves to position itself as an African player.
Peter Mageza, Absa`s head of African operations, said yesterday that Absa was just awaiting approval from Angola`s regulators for the deal to proceed.
`In terms of the negotiations with our potential partners, that`s done,` Mageza said. However, he was unable to name the bank involved.
As part of Absa`s strategy to position 10% of its capital in Africa, it aims to buy an African bank a year.
Although Barclays` proposed deal to buy a majority stake in Absa would widen the bank`s African footprint, Mageza said it would move ahead with its own deals in the meantime.
He said the Angolan deal was strategic due to that country`s wealth of natural resources.
`One of our strategies is also to follow trade flows.`
Absa would operate on the retail and wholesale levels in Angola, he said.
Should the deal receive approval, Absa will add it to the controlling stakes it has in banks in Tanzania and Mozambique, and minority stakes in Zimbabwe and Namibia. Mageza said discussions to buy a 49% stake in Zambia National Commercial Bank (Zanaco) were also continuing.
`Basically it`s a work in progress,` Mageza said. `There really is no change.`
Africa has been making a growing, although still small, contribution to Absa`s profits.
For the six months to September, the bank`s African operations contributed R42m or 1,7% of total headline earnings of R2,45bn. In the year-earlier period, they contributed only 0,9% of headline earnings.
Mageza said that although progress was being made, it would take a while before African operations made a more meaningful contribution to profits as many of the banks Absa had bought had to be turned around.
Although a deal with Barclays could lead to duplication in some countries, including Tanzania and Zimbabwe, Mageza said these would be dealt with on a case-by-case basis.
`There will be areas of overlap, which means we have to look at what each of the parties brings to the franchise,` Mageza said.
Earlier this week, Absa CEO Steve Booysen confirmed that should the Barclays deal go ahead, the first step would see the UK bank buying a majority stake in Absa in SA. The second phase would see it acquire control of the bank`s African assets.
