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|September 11th, 2012, 01:53 PM||#21|
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Barclays, Absa in Talks to Combine African Banking Assets
By Renee Bonorchis, Howard Mustoe and Ambereen Choudhury on August 21, 2012
Barclays Plc (BARC), Britain’s second- biggest lender by assets, and South Africa’s Absa Group Ltd. (ASA) said they’re in talks to combine their African units and complete a plan started seven years ago.
There’s no certainty the talks will lead to any deal, which wouldn’t be completed until 2013, the banks said in a statement. The combination would affect assets in Kenya, Botswana, Zambia, Tanzania and Ghana. Barclays, based in London, bought 54 percent of Absa in 2005 for $4.5 billion to expand in emerging markets.
Barclays shares rose. The British bank’s African operations may be worth as much as 20 billion rand ($2.41 billion), according to Patrice Rassou, an Absa investor who helps oversee about $41 billion as head of equities at Sanlam Investment Management in Cape Town. The continent has 1 billion people, faster growth rates than developed nations and as much as 80 percent of its adult population don’t yet have bank accounts.
“These are well-run, profitable operations with little overlap with Absa except for Tanzania,” Rassou said by phone. Strategically, it’s the right move for Absa given the potential for African growth, he said.
Robert Diamond, who resigned as Barclays chief executive officer last month after the lender was fined for manipulating global interest rates, sought to boost the British bank’s profit by combining Absa and Barclays’s products and customer bases across more than 10 African countries. Together the banks have almost 60,000 staff on the continent.
‘Single Entry Point’
Absa dropped its original plan to buy the Barclays assets in 2008 after commodity-driven economic growth in Africa sent their earnings surging, making the businesses too expensive to acquire. Barclays revived the plan in April 2011, aiming to consolidate operations at Absa headquarters in Johannesburg and move other work to Dubai.
The South African bank’s shareholders will get “a single entry point into Africa” from a deal, “giving shareholders in both businesses the benefit of African growth,” CEO Maria Ramos said in a telephone interview from Johannesburg today.
It’s not clear how the ownership structure will work or whether Barclays will take a larger stake in Absa, as “there’s lots of work to be done and it’s very early days,” Ramos said.
The announcement of the potential combination has “nothing to do with Bob leaving last month” and the operational integration has been underway for more than a year, Ramos said, referring to Diamond.
Barclays’s listed subsidiaries in Kenya and Botswana will be maintained, according to the U.K. bank. Kenya is Barclays’ largest African unit, Ramos said.
Barclays’s pretax profit from Africa, including the bank’s holding in Absa, rose 13 percent to 910 million pounds ($1.4 billion) in 2011. The unit contributed 15 percent of the bank’s 5.97 billion-pound pretax profit. Together, Barclays and Absa operate in 12 countries and have over 14 million customers, according to Absa’s annual report.
“They’ll have a single base and a single entity and be able to take a lot of costs out of it,” said Christopher Wheeler, an analyst at Mediobanca SpA in London. “It would be a net positive and will mean they can compete with the likes of Standard Chartered (STAN) in those markets.”
Since Barclays bought into Absa in 2005, the lender has gone from being South Africa’s best-performing bank stock to its worst after an exodus of executives, slowing income, and rising bad debts caused profit to slump. Rivals Standard Bank Group Ltd. (SBK) and FirstRand Ltd. (FSR) have boosted lending and expanded in Africa while Absa’s growth on the continent stalled.
“ This could prove to be a transformational transaction for Absa,” said Greg Saffy, a banks analyst at RMB Morgan Stanley in Johannesburg. “The key issue now is relative price.”
Barclays shares rose 3.2 percent to 197.05 pence by the close in London, giving the bank a market value of about 24.1 billion pounds. The stock has risen 12 percent this year, compared with the FTSE 350 Banks Index’s 14 percent advance in the period.
Absa slipped 0.9 percent to 141.01 rand in Johannesburg. It is the worst-performing stock on the six-member FTSE/JSE Africa Banks Index, little changed this year compared with the average return of 19 percent.
To contact the reporters on this story: Renee Bonorchis at email@example.com; Ambereen Choudhury in London at firstname.lastname@example.org; Howard Mustoe in London at email@example.com.
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org
Tanzania: 'Barclays, Absa Merger No Threat'
Tagged: Banking, Business, Company, East Africa, South Africa, Southern Africa, Tanzania
BY ABDUEL ELINAZA, 25 AUGUST 2012
BARCLAYS Bank Plc has said the ongoing talks with its subsidiary Absa Group of South Africa, on a proposed merger, would not affect the operations of Barclays Tanzania or the National Bank of Commerce (NBC).
"Barclays Bank of Tanzania and NBC would continue to operate as two separate and independent entities, with separate boards and management teams," a statement issued by Acting Head of Corporate Affairs Tunu Kavishe in Dar es Salaam on Friday said.
The bank assured shareholders that it was not guaranteed that the discussions would lead to a merger. And even then, the proposal was not expected to be concluded before next year.
Barclays first opened its doors in Tanzania in 1925 and continued to operate in the country until 1967 when its operations were nationalized to become NBC. It made a comeback in the year 2000.
Meanwhile, according to a statement issued by the NBC in Dar es Salaam on Friday, despite tough and aggressive competition and a sluggish economy, the bank believes that there are opportunities in the Tanzanian market that can be leveraged to ensure solid business growth.
The bank has declared a second quarter loss of 20.2bn/- which equated into a cumulative six months loss of 17.7bn/-, but believes that it can wipe out the losses.
The statement also said that the losses in the second quarter can be attributed to two items, namely Corporate Impairment losses amounting to 13.9bn/- and provisions raised for cost and under accruals from 2008 to June 2012 of 13.7bn/-, relating to technical assistance provided by a parent company abroad.
The statement quoted Acting Managing Director, Marius Alberts as saying that an independent contractor was used to review all balance sheet accounts and close off all items at risk. "These have been accounted for, it is something of the past, and we are looking forward to a very positive six months," he said.
|September 13th, 2012, 09:27 PM||#22|
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New bank to meet Tanzania central bank demands
Wednesday, 12 September 2012 11:30 John Mbalamwezi
DAR ES SALAAM, TANZANIA - Mkombozi Commercial Bank said it plans to raise its capital to over Tsh15bn ($9.3m) from the current Tsh10.1bn ($6.3m) to comply with the central bank regulation which requires commercial depository to have such capital.
Aiming at spreading its presence to the rest of the country in a very near future, a three years old commercial bank, which is under Tanzania Episcopal Conference (TEC), plans to raise the capital in three years to come, said Rev. Bishop Severine Niwemugizi, the Vice President of the Tanzania Bishop Council who initiated the idea to start the bank.
"We aim at spreading our wings to the rest of the country so as our bank would be able to serve many people in the country," Rev. Bishop Niwemugizi said in Dar es Salaam last week during opening of the Kariakoo branch which will become the bank's fourth branch since established in 2009.
"I call upon stakeholders and those with goodwill to our fast-growing bank to offer their support by buying the bank's shares to raise our capital to over $9.3 m to enable the bank to implement its expansion plan," Rev. Niwemugizi said.
He said that for the time being the bank has over 10,000 depositors and in order to increase the number of our customers, "we plan to open four other branches in Iringa, Moshi, Bukoba and Arusha by 2015.
According to bank's external auditor, Ernest & Young, for the year ended December 2011, the bank has achieved a tremendous growth which as at last year, the bank has been able to make profit of Tsh37.4m ($.23,421).
The bank's Managing Director, Ms. Edwina Lupembe said that the bank has been able to lend over Tsh600m ($375,735) to more than 100 small groups of the entrepreneurs with a lending rate of 22.5% a month.
"To raise the required capital and the bank's assets is the challenge for us but our plan to extend wings to the rest of the country should be implemented," Lupembe said.
She added that the bank's assets have increased from Tsh7.4bn ($4.6m) for year ended 2009 to Tsh39.06bn ($24.4m) by the end of August 2012. The bank's deposits have also increased from Tsh16.4bn ($10.2m) in the year 2010 to Tsh21.92bn ($13.7m) in 2011.
|December 12th, 2012, 10:43 AM||#23|
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Tanzania's CRDB Bank starts operations in Burundi
Fri, Dec 7 2012
NAIROBI, Dec 7 (Reuters) - Tanzania's CRDB Bank has opened a branch in neighbouring Burundi to tap growing trade between the two nations, its managing director said on Friday.
With only five percent of the Burundian population of eight million people having a bank account, the landlocked central African nation is seen as a banking frontier, attracting lenders like Kenya's KCB and Togo-based Ecobank.
Trade between Burundi and Tanzania has been growing in recent years, mainly because Burundian businesses rely heavily on the Tanzanian port of Dar es Salaam to import goods.
"People have had to carry chunks of money across the border to trade," said Charles Kimei, CRDB's head, in a statement.
Kimei said the bank would turn its attention towards the Democratic Republic of Congo, a vast, mineral-producing central African country that lacks a developed banking sector.
The Burundian President Pierre Nkurunziza welcomed CRDB, saying the country required more banks to help it become economically self-sufficient. It is one of the least-developed nations in the world.
CRDB, which is the largest commercial bank in Tanzania with over 85 outlets, said it spent $10 million to establish the Burundian operation. (Reporting by Duncan Miriri; Editing by Richard Lough and Helen Massy-Beresford)
|December 21st, 2012, 04:03 PM||#24|
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Absa Tanzania Unit to Boost Capital as Banks’ Bad Loans Grow
By David Malingha Doya and Renee Bonorchis - Dec 20, 2012
Absa Group Ltd. (ASA), the South African bank controlled by Barclays Plc (BARC), said shareholders are in talks to boost capital at its Tanzanian unit to help it grow amid an increase in bad debts and regulatory changes.
The National Bank of Commerce Ltd. in Tanzania remains well capitalized, Johannesburg-based Absa said in an e-mailed response to questions today. A plan to raise funds in the first quarter of next year would support the lender’s growth opportunities, Absa said.
NBC is considering boosting the capital it’s required to hold against deposits by 4 percent by raising funds “internally” and a decision will be made next month, Managing Director Lawrence Mafuru said in an interview in the commercial capital, Dar es Salaam. Absa owns 55 percent of NBC.
While lenders including FirstRand Ltd. (FSR) and Ecobank Transnational Inc. (ETI) have expanded in the East African nation, bad debts increased at four of Tanzania’s top six banks by assets in the three months through September, according to Serengeti Advisors Ltd., a Dar es Salaam-based research group. Impairments at NBC, the fourth-largest lender, grew to 14.7 percent of total loans in the third quarter, compared with 11.1 percent three months earlier, it said.
Federal Bank of the Middle East Ltd.’s Tanzanian unit, the country’s biggest lender, also reported increased bad debts along with National Microfinance Bank Ltd. (NMB) and Standard Chartered Bank Tanzania Ltd., Serengeti said.
“We need the funds to allow the bank to face the market with a lot more strength,” Mafuru said yesterday. “The money will help the bank remain within regulatory requirements of capital adequacy, as we increase lending and invest in technology.”
Impairments have increased partly because of the failure by borrowers in the agriculture industry to repay debts because of lower cotton prices, Mafuru said.
About a quarter of all loans in Tanzania go to the agriculture industry, with about 10 percent going to cotton farmers, according to Mafuru. The fiber is Tanzania’s second- biggest export commodity, after gold, he said.
The average ratio of non-performing loans to total loans for all 45 banks that operate in Tanzania was 8.1 percent in June, having risen from 7.5 percent in March and 6.7 percent December 2011, according to the Bank of Tanzania.
Tanzanian lenders have the highest level of impairments in the five-nation East African Community, said Abubakar Ukhotya, operations manager at the central bank’s directorate of banking supervision.
“Our desirable levels of NPL ratio to the loan book is 5 percent,” he said in an interview. The ratio in Kenya, East Africa’s biggest economy, is 5.4 percent, and 2.5 percent in Uganda, according to World Bank data.
Tanzanian banks’ assets may grow as much as 15 percent next year, spurred by an accelerating economy, increased electricity output and expanding manufacturing and construction industries, said Mafuru, who also heads the Tanzania Bankers Association. Growth this year was 10 percent, according to Serengeti.
In the “medium term,” banks in Tanzania stand to benefit from increased business from the discovery of 33 trillion cubic feet of gas off its coast by companies including BG Group Plc (BG/) and Statoil ASA (STL), it said.
“The hydrocarbon discoveries present significant opportunity for domestic banks to support prospective local suppliers of goods and services to the large firms carrying out exploration and production activities in the gas sector,” Serengeti analyst Aidan Eyakuze said in an e-mailed response to questions. “I anticipate further banking asset growth to be driven from these activities in the medium term.”
Tanzania, East Africa’s second-biggest economy, may grow 6.8 percent in 2013 compared with an estimated 6.5 percent this year, according to the International Monetary Fund.
Tanzania’s government owns 30 percent of NBC, while the International Finance Corp., the World Bank’s private-lending arm, holds 15 percent.
NBC last month reported net income fell by almost half to 4.2 billion shillings ($2.6 million) in the third quarter, from 8.2 billion shillings a year earlier.
To contact the reporters on this story: David Malingha Doya in Dar es Salaam at email@example.com; Renee Bonorchis in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Richardson at email@example.com