Thursday, January 28, 2021

ABCH ties knot with the world’s biggest financial institution

The African Banking Corporation Holdings (ABCH), clich├®d a deal with Citi Venture Capital International Wednesday aimed at seeing the Botswana registered bank spreading its wings across the African continent.

Citi Venture Capital International, a division of Citi GroupÔÇö- the world’s biggest bank ÔÇô pumped in US $ 25 million or P 163 million into ABCH, which will translate into 20 percent shareholding- and two seats on the board.

“We welcome the partnership and we believe that we will be able to build corporate governance and the people. We are also exploring possibilities of international listing starting from now onwards, which will strengthen our balance sheet,” Douglas Munatsi, Chief Executive Officer of ABC said.

However, the agreement that was signed on Wednesday is still waiting to be sanctioned by three bodies; Bank of Botswana, Botswana Stock Exchange and a Special AGM which will be held sometime in August.

Citi Group is the second biggest institution to seek shareholding in ABCH in recent history after the World Bank’s investment arm, International Financial Corporation (IFC), which took 10 percent.

Further, ABCH is gearing itself to be the first Botswana institution to have an international listing.
‘We are also looking at a right issue to raise P 1 billion so that we can take the bank across Africa,” Munatsi said, adding that will have to be decided at the Special AGM in the second half of this year.
“This is like a teenager growing into manhood. And we have to deliver on our mission,” he added.

According to the bank’s plan, it will focus strongly on the East and Central African countries such as Angola, Democratic Republic of Congo, and possibly Kenya, during its initial phase of expansion.

“Citi has been present in Africa in 17 countries and the group has invested US 7 billion in the emerging markets,” CEO of Citi Venture Capital based in London, Dipak Rastogi said.

“We have been watching what has been happening in Africa ÔÇô particularly in the financial services sector. We intend to work closely with (ABCH) board in an attempt to build the business,” he said.

The investment into ABCH is the first of its kind in Sub Sahara Africa for Citi Venture Capital International. Initially, the company had 20 banks which were evaluated and they were peered down to one where ABCH emerged as the most favourable candidate.
“We were looking at a company with growth ambition and robust in character. And we also looked at the chemistry that would resonate with us,” Rastogi said.

Some of the factors that influenced the decision of Citi Venture Capital International were Botswana’s financial and political stability and its high credit rating.

The move comes at a time when ABCH is on the verge of embarking on the retail banking to bolster its competitiveness in the markets that it already operates in. The move will include the upgrading of its platform, the structuring of the retail business and the challenging task of getting some customers.

“We have to look at all channels of branch network and plan a strategy of getting customers. This is a multi effort task and we expect it to be up and running by the fourth quarter of this year,” Munatsi said, adding that the hiring and training of the retail division will start in the next coming months.

ABCH has been listed on the BSE and the Zimbabwe Stock Exchange since 2000 and its biggest shareholders are Botswana Insurance Fund Management (Bifm) and Debswana Pension Fund while others include investors in the United Kingdom.

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