Feb. 19 (Bloomberg) -- Citigroup Inc., the U.S. lender scaling back in some emerging markets, plans to invest in Africa as it sees a pickup in mergers and acquisitions as well as debt and equity capital market deals on the continent.
The third-largest U.S. lender by assets has a “new strategic plan for sub-Saharan Africa” with Nigeria, East Africa and South Africa as its top priorities, Jim Cowles, chief executive officer for Europe, the Middle East and Africa, told reporters in Johannesburg today.
“On the growth in EMEA, we’re counting on Africa to be a major contributor,” Cowles said, declining to say how much the bank earns from Africa or how much it will invest.
Citigroup is among the international banks expanding across Africa as demand for assets rises and economic growth surges. Barclays Plc’s South African unit last month said its investment bank plans to extend brokerage, equity trading and other services into the rest of the continent to boost profit, while UBS AG, the world’s biggest wealth manager, is targeting wealthy clients in oil-rich Nigeria and Angola.
Citigroup also plans to expand its equity derivatives and transaction services businesses in South Africa, Donna Oosthuyse, the bank’s country officer said.
The plan for Africa comes after Citigroup CEO Michael Corbat last month said the bank should no longer be expected to offer clients unlimited financial services. Corbat is trimming spending and selling assets after taking over from Vikram Pandit, who expanded New York-based Citigroup’s operations in emerging markets before directors ousted him in 2012. Corbat, who was CEO for the EMEA region before replacing Pandit, said the bank will continue cutting costs.
The growth in Citigroup’s African operations has been “attractive,” Cowles, who is visiting five African countries including Tanzania and Kenya, said. While the bank isn’t immediately expanding into new countries, it will be boosting its balance sheet across the 11 sub-Saharan countries that it operates in and also investing in people and technology, he said.
Cowles and Citigroup’s North American Chief Executive Officer, Bill Mills, are visiting clients, regulators and staff across the continent. The bank has operations in 101 countries with 55 of them in Europe, the Middle East and Africa.
Following Corbat’s strategic review of the company, it is focusing on Russia, the U.A.E., Turkey and Africa as the growth opportunities within EMEA, Cowles said.
To contact the editor responsible for this story: Dale Crofts at firstname.lastname@example.org