Citigroup's Parsons Says Africa's Population is a `Sweet Spot' for Banks

Citigroup Inc., the U.S. lender with more than 200 million clients, said Africa’s population of 1 billion creates a “sweet spot” for financial institutions.

“A lot of the demographics here in Africa are exactly what financial services institutions are looking for as the sweet spot,” Citigroup Chairman Dick Parsons, 62, said in an interview at the Fortune Global Forum in Cape Town today.

The bank, based in New York, plans to fund more transactions in Africa and take on more clients that fall within the lender’s target market, Parsons said. The company is also targeting “organic” growth in Nigeria and sees Angola as an important opportunity, he said.

There are currently 10 distressed lenders and 14 healthy banks in Nigeria that may sell stakes, the country’s central bank has said. In South Africa, Old Mutual Plc said its holding in Nedbank Ltd. isn’t subject to acquisition talks now, while it may be in the future. FirstRand Ltd., South Africa’s second- largest bank, is looking at purchases in Nigeria and selling its insurance assets to become a “pure banking play,” according to Neville Chester, a banking analyst at Coronation Fund Managers in Cape Town.

“Africa is one of the most interesting” and “fastest growing” of emerging markets, Parsons said, adding that Nigeria is “particularly” interesting.

‘Given the demographic trends, given the presence of so much of the world’s natural resource base here, there is huge opportunity and it’s high margin,” he said.

Indonesia also holds “big opportunities” for Citigroup, the chairman said.

“Citi has a broad-band network that reaches out to all developing and emerging markets across the globe, and our job is to fill up the pipes in terms of services and products that our customers need, including Russia,” Parsons said. “Our CEO, Vikram Pandit, was just in Russia meeting” with President Dmitry Medvedev about the “creation of stronger domestic capital markets within Russia,” he said.

Citigroup, which received a $45 billion government bailout in 2008, is the world’s ninth-largest bank by market value. It fell 0.3 percent to $3.93 as of 9:30 a.m. in New York trading.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

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