Standard Bank Weighs Ivory Coast Banking LicenseOlivier Monnier and Renee Bonorchis
Standard Bank Group Ltd., the Johannesburg-based lender exiting some emerging markets, will consider setting up a bank in Ivory Coast within the next two years as it seeks to expand in French-speaking West Africa.
The bank would consider acquiring the operations of another bank or starting its own branches, Herve Boyer, Standard Bank’s head for French-speaking nations in west Africa, Sierra Leone and Liberia, said in a Nov. 15 interview. The lender is planning to open a representative office in the country in February after a failed coup prompted it to close its office there in 2003.
“We’ll use Ivory Coast as a hub, a center from where we will cover the other Francophone countries of the region,” he said from Abidjan, the commercial capital. “We can’t be the biggest African bank without reaching Francophone countries.”
Standard Bank has been selling assets in emerging markets outside Africa since 2011 to raise cash for expansion on the continent, the second-fastest growing region after developing Asia. Citigroup Inc., Standard Chartered Plc and Barclays Africa Group Ltd. are also increasing their presence in Africa as discoveries of oil, natural gas and other commodities in sub-Saharan Africa propel economic growth.
Standard Bank has operations in Ghana and Nigeria, while Paris-based Societe Generale SA’s local unit is the largest bank in Ivory Coast. The South African bank will target infrastructure projects including roads and airports, energy and mining in the region, according to Boyer.
Ivory Coast, which is bouncing back after a decade-long crisis that divided the country into a rebel north and government-run south, is a priority for the bank, Boyer said. President Laurent Gbagbo refused to hand over power after losing 2010 presidential elections, leading to a collapse of the economy and violence that left more than 3,000 dead.
The biggest economy of the eight-member West African Economic and Monetary Union and the world’s largest cocoa producer will grow 9 percent this year, slower than the 9.8 percent expansion last year, according to the government.
“We remain positive on the future of the region because of these huge investments in infrastructure projects,” Boyer said. “This is the key for the development of the region.”
To boost African returns, Standard Bank “should focus on organic growth in high potential countries, especially West Africa and Angola,” Patrice Rassou a fund manager at Sanlam Investment Management in Cape Town, said in an e-mailed response to questions today. Following the sale of emerging market assets, the bank has a better chance of making a success of Africa now, especially in retail banking, he said.
Standard Bank sold 80 percent of its Argentine unit to its largest shareholder, Industrial and Commercial Bank of China Ltd., almost a year ago for a 1.6 billion rand ($158 million) profit. Having sold units in Russia and Turkey, the lender is negotiating with Grupo Financiero Inbursa SAB to sell Brazilian operations for about 130 million reais ($57.4 million), two people with direct knowledge of the talks said last month. It may also sell its London-based global markets business.
Competition in Africa may get tougher since South Africa’s former Absa Group Ltd. bought Barclays Plc’s operations in eight countries on the continent in an all-share deal this year worth 18.3 billion rand. The newly named Barclays Africa Group has almost 10,000 ATMs, 1,000 branches and more than 33,000 staff across the continent and wants to offer clients corporate and investment banking, wealth management and insurance.
Standard Bank is the second-worst performing stock on the six-member FTSE/JSE Africa Banks Index this year after Barclays Africa. The shares fell 0.8 percent to 122.25 rand as of 5 p.m. in Johannesburg trading.