UBA’s Angola Entry Frustrated as Nigeria Bank Seeks License
United Bank for Africa Plc, which operates in 19 African countries, is renewing attempts to win an Angolan banking license after its first application expired.
UBA was told to reapply for a bank license in Africa’s second-largest oil producer three months ago after its first attempt expired after a four-year wait, Chief Executive Officer Phillips Oduoza said in a Dec. 13 interview at the bank’s headquarters in Lagos, the Nigerian commercial capital.
“Angola is a fairly complex market and they take their time and their processes and methodologies are slightly different from those of other African countries,” he said.
UBA is seeking to enter Angola as part of plans to diversify earnings and reduce reliance on its home market of Nigeria, which accounts for about 78 percent of revenue. The bank’s operations outside the country may account for as much as 25 percent of its business by the end of the year and 50 percent within the next three to five years, Oduoza said.
Ecobank Transnational Inc. (ETI), the Togo-based bank with a presence in 35 countries on the continent, has a representative office in Angola and is seeking licenses in two more Portuguese-speaking nations next year, Chief Executive Officer Thierry Tanoh said in a Dec. 3 interview in Abidjan, Ivory Coast’s commercial capital.
Angola’s $114-billion economy, recovering from a 27-year civil war that ended in 2002, will probably expand 5.1 percent this year, President Jose Eduardo Dos Santos said in October. Angola ranks 153rd of 177 countries on Transparency International’s 2013 Corruption Perceptions Index.
“Angola is a very interesting market and it’s one that’s growing very rapidly and there are a lot of opportunities there,” Oduoza said. “Our plan has always to be in Angola.”
UBA is also interested in Botswana, Ethiopia and Rwanda, though it hasn’t submitted license applications, he said. The bank isn’t interested in acquiring one of three nationalized Nigerian lenders the government is selling, he said.
The bank expects all its African subsidiaries to be profitable by 2015. Kenya, Tanzania, Uganda and Zambia have yet to become profitable because competition is tough and technology, particularly in Kenya is more advanced than in Nigeria, Oduoza said, referring to mobile banking products that are widespread in East Africa’s biggest economy, where the company has about five branches.
To contact the reporter on this story: Chris Kay in Lagos at firstname.lastname@example.org