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The coming boom in investment banking.

Figures recently released by Thomson Reuters show fees for investment banking services in Sub Saharan African totalling just $34.9 million during the first quarter of 2014, marking a 67 per cent decline on year-ago levels and, what's more, the lowest first quarter total for fees in the region since 2002.

On the basis of those numbers you might think the headline unduly optimistic. Yet the signs are there that activity is set to pick up. For example, Bloomberg reported Credit Suisse deploying investment bankers to woo African entrepreneurs, offering services from capital raising to trade finance and mergers and acquisitions advice.

Admittedly, Credit Suisse is withdrawing from Angola, the Democratic Republic of Congo and other African markets to cut costs but it is increasing its activity elsewhere with South Africa 'at the top of the list'.

Indeed, South Africa is also becoming a hot spot for back office function too; financial services careers website eFinancialCareers reports the country is emerging as the place to base investment banks' product control functions citing the examples of Barclays, which is in the process of shifting its fixed income product control functions to Johannesburg, and Standard Chartered, which is also moving its business to Johannesburg.

However, those aren't the only straws in the wind. Note especially the comeback of Bob Diamond, the controversial former head of Barclays Bank, as one of the founders of Atlas Mara. On 17 December 2013, Atlas Mara Co-Nvest Limited raised $325 million through an initial public offering on the London Stock Exchange. It is also being backed by Ashish Thakkar, the 32-year-old head of Mara Group, a $1 billion conglomerate with businesses in 19 African countries.

Atlas Mara's avowed intent is to 'create a financial institution that provides leadership, liquidity, access to investors, product innovation, and technology to support economic growth and strengthen financial systems in Africa'.

There's been a flurry of activity, with three significant news items coming hard on each other's heels. First, Atlas Mara reached agreements to acquire a majority of Botswana- based BancABC and take over ADC African Development Corporation AG (ADC). These deals, said Atlas Mara, would create a 'well-positioned banking group capable of offering a broad range of banking products, including corporate banking, treasury services, retail and SME banking, asset management and stock broking'.

Following that announcement came the news that Diamond had hired John Vitalo for the post of CEO of Atlas Mara. Vitalo joins the new institution from Barclays where he had held a number of senior managerial positions, including, most recently, as Chief Executive Officer, Middle East and North Africa since 2009. In the four years prior to that, based in Johannesburg, he had been responsible for building and leading Absa Capital, the pan-African investment bank.

At the same time Atlas Mara revealed it had signed a Memorandum of Understanding with the Government of Rwanda to pursue the privatisation of BRD - the commercial arm of the Development Bank of Rwanda. As Ashish Thakkar summed up events it has been 'an exciting few weeks for Atlas Mara'.

Robin Amlot

Managing Editor - CPI Financial

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Publication:Banker Africa
Geographic Code:6SOUT
Date:Apr 30, 2014
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