4 January 2012
The eurozone crisis may have cast a pall over global bankers’ New Year, but this hasn’t stopped a number of international institutions from increasing their presence in Africa – starting in South Africa – to take advantage of the continent’s fast growth rates, the Financial Times reports.
The publication lists four major institutions that set up shop in South Africa in 2011, in a shift “driven by the stagnation of developed economies, coupled with the potential of a resource-rich, but under-developed continent with 1-billion people”.
According to the Financial Times, in the course of 2011: JPMorgan began offering rand clearing services in South Africa, Credit Suisse set up a wholly owned subsidiary in the country, Barclays shifted its Africa headquarters from Dubai to Johannesburg, and China’s ICBC opened its first African representative office in Cape Town.
BNP Paribas also moved to expand its local footprint through the acquisition of a majority stake in Cadiz Securities, the derivatives research and brokerage unit of South African financial services group Cadiz Holdings.
ICBC said its Cape Town office would strengthen its strategic cooperation with South Africa’s Standard Bank, in which the Chinese bank acquired a 20% stake in 2008 for R36.7-billion – the biggest single Chinese investment in Africa to date.
The Financial Times quotes John Coulter, JPMorgan’s senior country officer for sub-Saharan Africa, as saying: “Better governance and macroeconomic policies, together with greater political stability in a number of African countries, have contributed to a significant improvement in the overall economic performance of the continent.
“As a consequence, Africa is being taken more seriously as an investment and business destination.
“The opportunity we see in Africa is really to build out our commercial banking business to deliver treasury and corporate banking services to our clients across Africa, at the same time opening up the way for investment banking opportunities,” Coulter told the FT.
“If we invest now, then we will reap the upturn in Africa, whether it’s in five years, 10 years or 20 years, but we recognise that we need to make that investment now.”
Leo Reif, head of the investment banking department at Credit Suisse South Africa, told the FT: “The dialogue these days with clients is about emerging markets to an increasing extent and they talk about Asia and then they want to talk about Africa.
“If you can’t talk about Africa, then they’ll find another bank.”