Thursday, September 24, 2020

Stanbic takes a lion’s share in diamond financing

Stanbic Bank, the fourth largest bank in the country, has jumped onto the bandwagon of diamonds beneficiation financing, raking the biggest share in the fledgling industry in Botswana.

“We look at areas of GDP and try to be relevant to the development of the country. Right now, we are looking at mining and energy,” head of corporate banking, Tasha Ferreira said.
He added: “We have released that there are number of opportunities in the down-stream.”

Stanbic has snatched 50 percent of the 14 sight holders that already operate in the country that will be allocated diamonds to the value of US $ 370 million (P 2.4 billion) during the course of this year.

The allocation is expected to be raised to US $ 5.500 million in the next year, giving the bank a comfortable loan book of close to P 3 billion.

“The diamond business is new to the group and you need different structures for you to understand it,” he said.

Stanbic’s entrant in the market puts it head to head with the likes of Netbank of South Africa, Antwerp Diamond Bank and the titanic ABN AMRO, which is currently troubled by the world financial crunch.

ABN AMRO, which is scheduled to open office in Botswana with a view of financing the diamond business, is currently weighing the future of its diamond division ÔÇô FortisÔÇöfollowing the decision of Netherlands, Belgium and Luxemburg to inject capital into it to save it from collapse.

Last week, the bank was engaged in a marathon of meetings in London where they were trying to sell its “orphan” to Standard Chartered Bank and the troubled Bank of Scotland.

Fortis is said to account for 40 percent of the diamonds debt world wide which is currently estimated at around US $ 18 billion.
As ABN AMRO was looking for a possible buyer for Fortis, the head of the World Diamond Federation, Avi Paz, issued a statement from his office in Ramat Ganz, Israel, to rough diamond suppliers urging them to limit supply to their clients as they were swiftly drowning into debt.

However, in Gaborone, Stanbic had embarked on strategy that would see itself getting a sizeable share in the diamond financing market. Stanbic recruited a former ABN AMRO employee who crossed over with a great number of his former clients in Belgium; he was instrumental in training some of his team. The team is currently composed of 11 people dedicated to the diamond industry and sightholders’ personal accounts. Bank of Botswana was also this week inspecting Stanbic diamond branch located at Diamond Technology ParkÔÇönear Diamond Trading CompanyÔÇöbefore its occupancy which is slated to start next month.

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