Absa Bank rules out Nigerian bank acquisition
South African leading commercial bank, Absa (Amalgamated Bank of South Africa) has ruled out the acquisition of a Nigerian bank in the pursuit of its aggressive growth strategy. Absa’s Chief Executive Officer, Maria Ramos, disclosed this to Reuters on the sidelines of the World Economic Forum in Davos yesterday.
Ramos said while Nigeria is a big and exciting banking market, Absa would build its presence in the country slowly and organically and did not plan to become a top lender.
She stated: “For us to be in the top three or four would mean us going out and acquiring a Nigerian business. The Nigerian banks are big and expensive and we wouldn’t be looking to do that.”
South Africa’s third biggest lender had not previously been so explicit on its intentions in Nigeria, which is set to become a lively battleground in the fight for Africa’s banking market.
It has highlighted the country as key to its plan to double its share of banking revenues on the continent to 12 percent – one of a series of ambitious targets Absa has set as it tries to carve out a name for itself after separating from Britain’s Barclays in 2017.
Ramos was however cautious on the potential in Nigeria, described by McKinsey last year as a “sleeping giant” where banking penetration is far lower than expected relative to income levels.
She maintained that the market was “big and exciting” and remains important, but noted that Absa was concentrating on the “huge amount of opportunity” in its other markets outside South Africa.