Standard Bank Group Ltd.’s Angola unit was profitable last month as it expands in Africa’s second-biggest oil producer, said Deputy Chief Executive Officer Ben Kruger.
Africa’s largest lender hadn’t been profitable in the country because of “the extent of the investment we’re making, but there is a fairly large opportunity and that’s why we want to invest reasonably quickly,” Kruger said in an interview in Accra, Ghana’s capital, today. It got a license to start operations in Angola in November 2009.
Standard Bank, which operates in 17 African countries, has been expanding in Nigeria, Kenya and Angola, seeking to boost profit. It has reversed decisions to look for acquisitions in the continent. Angola’s economy is forecast to expand by 6.8 percent this year and 5.5 percent in 2013, according to the International Monetary Fund.
The Johannesburg-based lender said on Aug. 16 that its return-on-equity in Africa, excluding South Africa, in the first half had risen to 10.6 percent from 6.9 percent a year earlier. The measure of profitability was still below its cost of equity, which was 13.7 percent in the period.
In Nigeria and Ghana, Standard Bank has “reached critical mass,” Kruger said. “We are well entrenched in the markets where we are now, so we don’t need to buy anything, but we always remain vigilant.”
Standard Bank’s stock gained for a second day, rising 0.1 percent to 105.44 rand by 4:15 p.m. in Johannesburg.
Kruger said its South African is “very well capitalized.” Capital for the unit will be beefed-up with proceeds from the sale of its Argentine unit to Industrial & Commercial Bank of China Ltd., worth about $300 million after transaction costs, Kruger said. Regulatory approval was received 10 days ago, he said.