African Capital Markets News

Sub-Saharan Africa investment banking deals in Q1

Mergers and acquisitions (M&A) in sub-Saharan Africa in Q1 of 2018 at $4.7 billion were 63% down on a year earlier, according to investment banking analysis for sub-Saharan Africa by Thomson Reuters, but there were $2.7bn in equity follow-on issues and $13bn in debt issues. Rand Merchant Bank topped the ranking of investment banking earnings, gaining $10.3 million, 9.3% of the total $117.6m earned during the quarter.

Completed M&A generated 20% and equity capital markets 37% of the total fee pool. Thomson Reuters says equity and related issuance was at its highest since 2007.

Fees from completed M&A totaled $23.4m, a 57% decrease year-on-year, while equity capital markets underwriting reached $43.1m, the best start since 2007. Domestic and inter-SSA M&A totaled $483m, down 81% year-on-year and the lowest annual start since 2006. Inbound M&A is down 73%, driven by the lowest number of deals since 2004, while outbound M&A is on a six-year high, up 91% to $1.6bn. Most (93%) of the outbound M&A was by South African companies, while acquisitions by companies headquartered in Mauritius accounted for 6% and in Seychelles for 1% respectively. Citi topped the financial advisor table for Q1 2018 for announced M&A with “any sub-Saharan Africa involvement” with 7% market share.

The biggest deal of Q1, according to Thomson Reuters, was Milost Global Inc’s US$1.1bn leveraged buyout transaction to acquire the entire share capital of Primewaterview Holdings Nigeria through its African subsidiary Isilo Capital Partners, announced on 10 January.

All the equity capital markets activity in the region was follow-on offerings, with 14 transactions. It is the first time there were no primary equity issues since 2012. The biggest was a follow-on offering by PSG Group, followed by offers from Sanlam and Lafarge Africa. Standard Bank Group tops the SSA equity capital markets league table in Q1 2018 with a 26% share of the market, followed by Investec at 12% and PSG Capital Ltd at 11%.

Sneha Shah, Managing Director for Africa at Thomson Reuters, said: “The most active Sub-Saharan Africa equity capital markets sectors for Q1 2018 were financials followed by materials, real estate, industrials, retail, and consumer staples.”

The most active debt issuer nation was Côte d’Ivoire with US$4.6bn in bond proceeds, 36% of market activity, followed by Nigeria and Senegal. Citi took the top spot in the SSA bond ranking for Q1 2018 with 24% market share. Syndicated lending fees declined, falling to $12.7m down 66% from Q1 2017. ING ranked first for syndicated loans.

Fees from underwriting in debt capital markets were $38.4m, the top value since Thomson Reuters started keeping these records in 2000, and up from $19.4m during Q1 2017.

European Bank for Reconstruction and Development explores Africa expansion

The European Bank for Reconstruction and Development (EBRD), a top backer of capital markets development, is debating new expansion into sub-Saharan Africa and new parts of the Middle East and raising its lending by as much as a third from some EUR9.5 billion euros ($11.7 bn) at present. According to this story on Reuters.

Sir Suma Chakrabarti, President of the EBRD since 2012, said in an interview: “The debate is starting with our shareholders: ‘Would you like us, gradually, incrementally to go to a few more places maybe in sub-Saharan Africa in particular?’” He stressed that it was only the start of a discussion and no decision would be made soon.

The Bank is owned mainly by Western governments and was set up in 1991 to invest in the ex-communist economies of eastern Europe but has expanded rapidly since 2008 and operates in more than 30 countries from Morocco to Mongolia. If shareholders approve at a meeting in May in Jordan, he said analysis could take a year and a final green light could be given at its 2020 annual meeting.

New countries of operation would have to be democracies or at least committed to becoming a democracy, and they must also aim for the kind of market-based economies that the development bank has always focused its efforts on.

The plan to move deeper into Africa meanwhile could dovetail with going into more countries in the north of the continent such as Algeria, or in the Middle East such as Iraq or Libya.

One motivation for expansion is to reduce concentration risks, with much of EBRD investment currently going into 5 countries, led by Turkey, Egypt and Ukraine, all of which have economic and political challenges. According to the interview, even in EBRD “traditional heartlands like Hungary and Poland attitudes are shifting away from its principles”.

IPO for I&M Bank Rwanda extended to 10 March

The extended deadline for the initial public offer (IPO) of I&M bank Rwanda is 10 March. The Government is selling its 19.8% stake in the bank in an offer launched on 14 Feb and originally set to close on 3 March. On offer are 99 million shares at RWF90 ($0.11) each, with a minimum purchase of 1,000 shares.
The offer could contribute nearly RWF8.9bn towards Government plans to raise RWF11.5bn ($13.9m) to build a second airport near Kigali, according to a report in KenyanWallStreet.com. As part of the offer, 5m new shares were created for an employee share offer programme (ESOP).

Prospectus delays
The Ministry of Finance and Economic Planning said it had received enthusiastic investor interest across the region. According to a statement: “This is to ensure that prospectuses and application forms reach investors across the country and the East African region in good time, and in response to requests from retail and institutional investors given the early start to the year, it has been decided to avail additional time to enable investors participate.”
New Times newspaper quotes Shehzad Noordally, the Chairman, Rwanda Association of Stockbrokers and Market Intermediaries: “There has been a slight delay in publishing prospectuses, which is an administrative issue that has been resolved. This has, therefore, resulted in the prospectuses not being distributed on time to the general public”.
I&M Bank, the Capital Market Authority, and the Rwanda Stock Exchange have approved the extension. The shares will be listed on the RSE.
The Government is committed to the development of capital markets as a means to building a strong foundation for long-term financing for both private and public sector, according to Minister for Finance and Economic Planning, Claver Gatete.
Previously Government has sold shares in 2 enterprises leading to listings – Bralirwa (Brasseries et Limonaderies du Rwanda, the largest brewer and beverages company) and Bank of Kigali. The other local listing is Crystal Telecom, subsidiary of Crystal Ventures Ltd, which represents a chance to trade the shares of MTN Rwanda. Crystal Ventures was profiled in the latest issue of The Economist magazine.
I&M Bank Rwanda was established in 1963 and was called Banque Commerciale du Rwanda Limited (BCR) before becoming the Rwanda subsidiary of I&M Bank Group Limited, headquartered in Nairobi, with operations in four countries.

Reasons for privatization

According to an earlier CMA press release, this is the Government of Rwanda’s strategy behind the listings:
“It is the GoR’s objective to encourage investment of shares of successful companies amongst the citizens of Rwanda, and to promote the development of the country’s capital markets. The GoR is pursuing a divesture program of state-owned enterprises, which kicked off in earnest in 1997 with a total of 72 institutions earmarked for privatization/divesture.
The specific objectives of GoR’s privatization /divestiture program entail:
• Reducing the shares held by Government in public companies and thus alleviating the financial burden on its resources (through the elimination of subsidies and state investments) and reducing its administrative obligations in the enterprises
• Ensuring better management and financial discipline in privatized companies
• Attracting foreign investment in Rwanda and the accompanying transfer of technology and knowhow
• Developing and promoting Rwanda’s capital markets and
• To give to the wider public the opportunity to participate in the shareholding of a well-run company”.

AfDB and stock exchanges group ASEA sign MoU for capital markets projects

Africa’s leading financial institution, the African Development Bank (AfDB), is pairing with the African Securities Exchanges Association (ASEA) to deepen and connect Africa’s financial markets. The partnership aims to help mobilize more resources to drive growth.
The two will work on projects of mutual interest such as developing financial-markets infrastructure, introducing new products, improving market liquidity and participation, information-sharing and capacity-building. AfDB and ASEA signed a 5-year memorandum of understanding on 11 July. This provides “a collaborative framework for harmonizing and coordinating the efforts”, according to an AfDB press release.
The Bank and ASEA have already started successfully collaborating on the African Exchanges Linkage Project, which they co-initiated to improve liquidity and foster greater investments and trading across markets. This aims to link key regional markets and has proposed Casablanca, Johannesburg, Nairobi and Nigerian stock exchanges as regional hubs, according to project documents.

AfDB President, Akinwumi A. Adesina says deepening and integrating Africa’s financial markets to mobilize domestic resources to fund African economies is very important to deliver the Bank’s “High 5s” priorities: Light up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa and Improve the Quality of Life of Africans (all part of the bank’s 2030 agenda for attaining the global Sustainable Development Goals – SDGs).
He says there are huge pools of capital available in sovereign-wealth, pensions and insurance funds and these can be used for developing Africa through appropriate intermediation and capital-markets products. He called for “increased mobilization of domestic pools of savings and support for small and medium enterprises (SMEs), as they constitute the bulk of Africa’s private sector.”
Adesina pointed to the bank’s progress in financial markets development through issuing and listing local-currency bonds in Uganda, Nigeria and South Africa. The bank has also created African Financial Markets Initiative (AFMI) to support domestic bond markets through the African Financial Markets Database. The bank will soon launch an African Domestic Bond Fund building on the success of the AFDB Bloomberg® African Bond Index, which started in February 2015 to combine the Bloomberg South Africa, Egypt, Nigeria and Kenya local-currency sovereign indices and was expanded in October 2015 by Botswana and Namibia..
ASEA President, Oscar N. Onyema, CEO of the Nigerian Stock Exchange, says the MoU will frame projects focused on the development of exchanges, deepening the stock markets and ultimately fueling African economic growth.

The winners – Africa’s top banks and bankers of 2016

Cameroon is a big winner at this year’s African Banker Awards, the 10th edition. The winners were announced yesterday (25th May) in Lusaka. Morocco’s Attijariwafa Bank, active in 20 countries, wins the prestigious Bank of the Year Award and GT Bank CEO Segun Agbaje is recognized as Africa’s Banker of the Year for his leadership of the Nigerian banking giant, one of Africa’s most profitable banks.

African Banker Awards have become the pre-eminent ceremony recognising excellence in African banking. They are held on the fringes of the annual meetings of the African Development Bank. Your editor is proud to be among the judges and can comment on the excellence of the many submissions from great banks all over Africa.

For the first time, two Cameroonians feature among the laureates: Alamine Ousmane Mey wins Minister of Finance category or his contribution to socio-economic development in his country. Leading banker and economist Paul Fokam, President of the Afriland First Group, is awarded the Lifetime Achievement Award; he is a serial entrepreneur, a renowned economist and his bank is one of the more important institutions in Central Africa. Cameroon scored a hat trick as Lazard’s credit-enhanced currency swap won the award for “Deal of the Year – Debt”.

Other winners include South Africa’s Daniel Matjila, CEO of South Africa’s Public Investment Corporation, a fund with $139bn funds under management. He was awarded the African Banker Icon, recognising the significant investments by the fund into African corporations and the lead role he has played in driving investment from South Africa into the continent.

The African Central Bank Governor of the Year accolade was given to Kenya’s Patrick Njoroge. Kenya’s central bank, largely unknown a year ago, has managed to navigate a tough economic climate and Patrick has been credited with cleaning up the banking sector in his country.

Speaking at the exclusive Gala Dinner at the Intercontinental Hotel attended by over 400 financiers, business leaders, and influential personalities and policy makers, Omar Ben Yedder, Group Publisher of African Banker magazine, which hosts the awards in partnership with BusinessInAfricaEvents said: “It has definitely been a defining decade in banking in Africa. We have recognised true leaders tonight who are playing a critical role in the socio-economic development of the continent.

“Finance remains a key component of development, be it in terms of financing massive infrastructure projects that today are being wholly financed by consortia of African banks, or SME financing. It’s happening because of strong, bold and visionary leadership. I have been privileged to honour some truly exceptional individuals who have left an indelible mark on the industry over the years.

“We are very grateful to our High Patron, the AfDB, for their unwavering support in this initiative and our thanks also go to our sponsors: MasterCard, Ecobank, Nedbank, African Guarantee Fund, PTA Bank, CRDB Bank, Arton Capital and Qatar Airways for partnering with us and enabling us to reward outstanding achievements, commend best practices and celebrate excellence in African banking”.

This year’s judging panel was made up of Koosum Kalyan, Chairman of EdgoMerap Pty Ltd; Zemedeneh Negatu,Managing Partner of Ernst & Young Ethiopia; Tom Minney, Chief Executive of African Growth Partners; Alain le Noir, CEO of Finances Sans Frontières; Christopher Hartland-Peel, Principal at Hartland-Peel Africa Equity Research and Kanika Saigal, Deputy Editor of African Banker Magazine.

THE 2016 AFRICAN BANKER AWARD WINNERS

• Bank of the Year: Attijariwafa Bank (Morocco)
• Banker of the Year: Segun Agbaje – GTBank (Nigeria)
• Minister of Finance of the Year: Alamine Ousmane Mey (Cameroon)
• Central Bank Governor of the Year: Patrick Njoroge (Kenya)
• African Banker Icon: Daniel Matjila, CEO PIC (South Africa)
• Lifetime Achievement Award: Paul Fokam, Founder Afriland First Bank (Cameroon)
• Investment Bank of the Year: Rand Merchant Bank (South Africa)
• Award for Financial Inclusion: Ecobank (Togo)
• Best Retail Bank: BCI (Mozambique)
• Socially Responsible Bank of the Year: Commercial International Bank (Egypt)
• Innovation in Banking: Guaranty Trust Bank (Nigeria)
• Deal of the Year – Equity: Naspers $2.5bn Accelerated Equity Offering (Citi)
• Deal of the Year – Debt: Cameroon’s Currency Swap (Lazard)
• Infrastructure Deal of the Year: Azura – Edo IPP (Fieldstone; Rand Merchant Bank; Standard Bank; IFC)
• Best Regional Bank in North Africa: Commercial International Bank (Egypt)
• Best Regional Bank in West Africa: Banque Atlantique (Côte d’Ivoire)
• Best Regional Bank in Central Africa: BGFI (Gabon)
• Best Regional Bank in East Africa: CRDB Bank (Tanzania)
• Best Regional Bank in Southern Africa: MCB (Mauritius)

For more on the African Banker Awards, please visit: http://ic-events.net/.

Bangladesh Central Bank hit for $951m, its cybersecurity relied on second-hand, $10 switches

This story is not strictly capital markets, but a useful cautionary tale

REUTERS, 21 APRIL 2016
Bangladesh’s central bank was vulnerable to hackers because it did not have a firewall and used second-hand, $10 switches to network computers connected to the SWIFT global payment network, an investigator into one of the world’s biggest cyber heists said.
The shortcomings made it easier for hackers to break into the Bangladesh Bank system earlier this year and attempt to siphon off nearly $1 billion using the bank’s SWIFT credentials, said Mohammad Shah Alam, head of the Forensic Training Institute of the Bangladesh police’s criminal investigation department.
“It could be difficult to hack if there was a firewall,” Alam said in an interview.
The lack of sophisticated switches, which can cost several hundred dollars or more, also means it is difficult for investigators to figure out what the hackers did and where they might have been based, he added.
Experts in bank security said that the findings described by Alam were disturbing.
“You are talking about an organization that has access to billions of dollars and they are not taking even the most basic security precautions,” said Jeff Wichman, a consultant with cyber firm Optiv.
Tom Kellermann, a former member of the World Bank security team, said that the security shortcomings described by Alam were “egregious,” and that he believed there were “a handful” of central banks in developing countries that were equally insecure.
Kellermann, now chief executive of investment firm Strategic Cyber Ventures LLC, said that some banks fail to adequately protect their networks because they focus security budgets on physically defending their facilities.

Police blame bank, SWIFT
Cyber criminals broke into Bangladesh Bank’s system and in early February tried to make fraudulent transfers totaling $951 million from its account at the Federal Reserve Bank of New York.
Most of the payments were blocked, but $81 million was routed to accounts in the Philippines and diverted to casinos there. Most of those funds remain missing.
The police believe that both the bank and SWIFT should take the blame for the oversight, Alam said in an interview.
“It was their responsibility to point it out but we haven’t found any evidence that they advised before the heist,” he said, referring to SWIFT.
A spokeswoman for Brussels-based SWIFT declined comment.
SWIFT has previously said the attack was related to an internal operational issue at Bangladesh Bank and that SWIFT’s core messaging services were not compromised.
A spokesman for Bangladesh Bank said SWIFT officials advised the bank to upgrade the switches only when their system engineers from Malaysia visited after the heist.
“There might have been a deficiency in the system in the SWIFT room,” said the spokesman, Subhankar Saha, confirming that the switch was old and needed to be upgraded.
“Two (SWIFT) engineers came and visited the bank after the heist and suggested to upgrade the system,” Saha said.

Global whodunnit
The heist’s masterminds have yet to be identified.
Bangladesh police said earlier this week they had identified 20 foreigners involved in the heist but they appear to be people who received some of the payments, rather than those who initially stole the money.
Bangladesh Bank has about 5,000 computers used by officials in different departments, Alam said.
The SWIFT room is roughly 12 feet by 8 feet, a window-less office located on the eight floor of the bank’s annex building in Dhaka. There are four servers and four monitors in the room.
All transactions from the previous day are automatically printed on a printer in the room.
The SWIFT facility should have been walled off from the rest of the network. That could have been done if the bank had used the more expensive, “managed” switches, which allow engineers to create separate networks, said Alam, whose institute includes a cyber-crime division.
Moreover, considering the importance of the room, the bank should have deployed staff to monitor activity round the clock, including weekends and holidays, he said.
(Additional reporting by Jim Finkle in BOSTON; Editing by Paritosh Bansal, Raju Gopalakrishnan and Alan Crosby).

$81m to Manila casinos
If you want to read more about how the missing $81m ended up in casinos and with junket operators in the Philippines, brought in by 2 Chinese residents of Manila and Beijing, Fortune takes up the story.

 

Rwanda Stock Exchange expects 3 share offers (IPOs)

Rwanda Stock Exchange

The Rwanda Stock Exchange is expecting 3 initial public offers IPOs of shares in the coming months, which will bring the total number of equities listed for trading to 10. No details were disclosed, but the East African newspaper reports the 3 are among the most profitable in their sectors. Pierre Celestin Rwabukumba, bourse CEO, told Bloomberg: “We expect three initial public offerings this year. Due to disclosure restrictions I cannot tell you which ones.”
The East African’s Kabona Esiara wrote: “They are a bank where a principal investor is liquidating interests in order to venture into other businesses and a transport company that is seeking to fund acquisition of a modern fleet. A third company involved in logistics is looking for expansion capital. The latter two are classified as small and medium enterprises (SMEs).” The IPOs are said to be at an advanced stage, with the prospectuses going through Capital Markets Authority checks before roadshows in Burundi, Kenya, Rwanda, Tanzania and Uganda begin.”
Davis Gatharaa, managing director at Baraka Capital was reported saying: “2016 should witness increased market capitalisation, liquidity and turnover largely driven by new listings. We believe the Rwanda Stock Exchange offers a bargain hunting ground for foreign investors helped by a very strong dollar.”
IPOs on the RSE previously were Crystal Telecom (owns 20% of MTN Rwandacell) in July 2015, Bank of Kigali in 2014 and beverages firm (brewer) Bralirwa in 2011, launching the equity market. I&M Bank had issued a corporate bond in 2008. RSE statistics showed RWF34 billion ($45.5 million) in trading from January to November 2015. Market capitalization was RWF2.82 trillion ($3.75bn).
The market saw declines with the Rwanda Share Index down 21% but the All Share Index was down 3.9%. and the paper reports that analysts do not expect strong performance this year. Robert Mathu, CEO of the Capital Market Authority regulator, was reported saying: “Weak global commodity prices weakened the economic outlook for most of sub-Saharan Africa. Coupled with the currency bleeding that was experienced by most of these African countries, this led investors to adopt a wait-and-see approach on African stockmarket prices.”
When the bourse was launched the Capital Market Advisory Council said in 2011 that government planned to offer shares in 6 companies on the domestic exchange, including Commercial Bank of Rwanda, now known as I&M Bank Rwanda, and Sonarwa Insurance. The New Times newspaper reported in April 2015 the government is planning an initial public offering of its 19.8% stake in the Rwandan unit of Nairobi-based I&M Holdings Ltd.
In a report on AFKInsider Rwakumba said the bourse is targeting new retail investors: “ We are focusing a lot on the demand side with specific attention on retail investors. We are increasingly getting more and more new investors; in 2015 we had a surge of new investors of 19.2%. We are to keep building on this momentum to entice new investment so that we don’t face challenges in supply and demand sides.”

Announcing the winners – African Banker Awards

Congratulations to the winners of the 2015 African Banker Awards announced in Abidjan on 27 May. It is always a privilege to be a judge and I am very impressed with so many of the excellent business ventures and projects, including billion-dollar infrastructure plans and connectivity for tens of millions of Africans. Competition is very hot and all of the short-listed entries for this year’s ninth awards were excellent.

Morocco’s Groupe Banque Populaire triumphs as 2015 African Bank of the Year and Ghana’s Albert Essien, Group CEO of Ecobank, wins the award for African Banker of the Year. Tidjane Thiam, from Cote d’Ivoire and the first African CEO of a FTSE100 company, wins the African Banker Icon award and Nigeria’s Jim Ovia, Chairman of best-performing Zenith Bank wins the Lifetime Achievement category.

Groupe Banque Populaire has recently taken a major stake in West African group Banque Atlantique and helped to turn around its performance significantly. Essien inherited a bank in a precarious position last year, but has managed to steady the ship and bring in some important shareholders to strengthen Ecobank’s capital base. Thiam is the CEO of Prudential insurance and shortly to become CEO of bank Credit Suisse.

The awards were hosted by African Banker magazine at a gala dinner in Abidjan, Cote d’Ivoire, with over 500 people there including Ministers, Central Bank Governors and the CEOs of some of Africa’s leading Banks and financial institutions.

Here is the full list of winners:
African Bank of the Year
Groupe Banque Populaire – Morocco

African Banker of the Year
Albert Essien, Group CEO Ecobank (ETI)

Lifetime Achievement Award
Jim Ovia Chairman, Zenith Bank – Nigeria

Finance Minister of the Year
Hon. Claver Gatete – Rwanda

Central Bank Governor of the Year
Prof Njuguna Ndung’u – Kenya

African Banker Icon
Tidjane Thiam, former Finance Minister of Cote d’Ivoire and CEO of Prudential

Best Regional Banks in Africa

Best Bank in North Africa
Attijariwafa Bank – Morocco

Best Bank in West Africa
Orabank

Best Bank in Central Africa
Groupe BGFI Bank – Gabon

Best Bank in East Africa
Bank of Kigali – Rwanda

Best Bank in Southern Africa
Banco de Comercio e Investimentos – Mozambique

Best Retail Bank in Africa
Standard Bank – South Africa

Investment Bank of the Year
Rand Merchant Bank – South Africa

Award for Innovation in Banking
Millennium BIM – Mozambique

Socially Responsible Bank of the Year
BMCE Bank – Morocco

Award for Financial Inclusion
Fondation Attawfik – Morocco

Deal of the Year – Equity
Seplat IPO, Standard Bank

Deal of the Year – Debt
$850m Commercial and ECA Backed Financing Package for the Ethiopian Railways Corporation, Credit Suisse

Trade Finance Deal of the Year
$1.3bn Petroleum Export Limited Syndicated Pre-export Facility, Commercial International Bank (CIB) – Egypt

Infrastructure Deal of the Year
CENPOWER – KPONE IPP, Africa Finance Corporation – Nigeria

Best Islamic Finance Initiative
Senegal Sukuk, Citi and ICD

MasterCard International supported the event and MasterCard Division President for Sub-Saharan Africa, Daniel Monehin said: “We believe that the African Banker Awards understands precisely what excellence in banking means – one only has to consider the Award winners and nominees tonight. This is why we are proud to support these Awards, where we recognize and commemorate our banking colleagues who have, in the last year, provided us with outstanding examples of progress towards our shared goal of banking excellence.” Ecobank/Nedbank, Banque Internationale pour l’Afrique au Congo (BIAC), Banque Altantique, Groupe Banque Centrale Populaire, GT Bank and Coris Bank International also supported the Awards, along with ECAir, Sopra Banking Software and Travelex.

Omar Ben Yedder, Publisher of African Banker thanked the sponsors and the judging panel which this year included Ade Adebajo, Consultant, Debt Capital Markets – Africa; Koosum Kalyan, Chairman, EdgoMerap Pty Ltd; Tom Minney, Editor, African Capital Markets News & African Growth Partners Ltd; Alain le Noir, CEO – Finances Sans Frontières; Zemedeneh Negatu, Managing Partner – Ernst & Young Ethiopia; Michel Losembe, President – Congolese Association of Banks; Paul Derreumaux Honorary President – Bank of Africa Group and Christopher Hartland – Peel, Principal – Hartland-Peel Africa Equity Research.

Ben Yedder said “We have a fantastic crop of winners once again and they are widespread in terms of countries. East Africa won two coveted awards: the Minister of Finance and Central Bank Governor categories for Rwanda and Kenya, respectively. Morocco had a strong showing with four awards. Mozambique did well winning two awards in the most innovative bank and best bank in Southern Africa categories. It is great to see banks and financiers rise to the challenge to keep innovating and having a positive impact on Africa’s growth. The growth story will depend on a strong and resilient banking system, one that is both bold and responsible. We see plenty of these qualities amongst our winners tonight.”

Visa helps towards remittance target cost of 5%

On average Africans are paying on average 12% ($25) to send $200 home, which is twice as much as the global average. According to UK thinktank Overseas Development Institute (ODI): “The global community pledged to cut remittance charges to 5% by 2014, yet this ‘super tax’ shows there is a long way to go. Our report urges governments to increase competition in money transfer remittances and to establish greater transparency on how fees are set by all market operators.”

In addition, many African businesses are finding it harder to get access to banking services as banks are tending to shy away from countries where they see more risk and less profits, after a couple of years of massive fines by US regulators on global banks for their global operations. This means that there are less routes to send money to Africa, last year there was a fight to keep the last legitimate banking payment lifeline to Somalia, offered by Barclays, open. Cutting this would have ended many transfers including remittances and aid.

According to a story in Business Day of 16 July, the World Bank, Group of Eight (G-8) and Group of Twenty want the price charged by banks and money transfer operators to send remittances to and from Africa, as well as within the continent, reduced to the G-8 target of 5%, from the average 12.4%. It says that payments technology company Visa is working closely with South Africa’s banks and retailers to open more corridors for consumers to send remittances more cheaply.

ODI said 2 money transfer operators — Western Union and MoneyGram — account for two-thirds of remittance transfers. Remittance prices are even higher between African countries, according to the World Bank.

According to the Business Day report Visa has launched a programme “at a ‘tenth of the price of the traditional players’ using its network connecting banks across 200 countries, to send money from one Visa card to another, Visa sub-Saharan Africa head Mandy Lamb said in Johannesburg on Tuesday.

“Consumers can send money via cellphones, a bank branch, an ATM, internet banking or a point of sale machine at a retailer, in real time. Equity Bank in Kenya was the first sub-Saharan bank to launch the programme last year.

“Visa is certifying some banks and retailers in South Africa to allow them to offer remittances. Some are to start the service between now and the end of year, said Ms Lamb.

“‘In South Africa we have seen a great interest in banks wanting to offer remittance as they have seen the business case … it is lucrative for them and meets the World Bank requirements in terms of bringing down the costs of remittance,’ she said.

“Retailers are also interested in sending and receiving remittances as they have realised it is ‘commercially viable for the lower end of the economy’, said Ms Lamb.

“Visa research estimates that around $73bn was sent via money transfers in sub-Saharan Africa in 2012 and this would grow at double-digit rates to $101bn by 2017.

“This is a substantial opportunity for Visa which benefits from remittance flows, disbursement flows and prepaid cards in the market. By 2017, Nigeria would account for $55.8bn in remittances, Kenya $27.5bn and SA $17.6bn, according to Visa.

“Remittances sent from outside Africa would be the fastest-growing market, expected to amount to $38bn by 2017 — or 27% of the total remittance market. This would be an increase from $19bn in 2012 when this category made up 20% of the total remittance market.”

Women scoop African Banker Awards 2014

Women triumphed at this year’s African Banker Awards 2014: Vivienne Yeda, Director General of the East African Development Bank, scooped the award for African Banker of the Year; Linah Mohohlo of the Bank of Botswana was named Central Bank Governor of the Year; and Elizabeth Mary Oleko, chairperson of the Kenya Women Finance Trust, scored the Lifetime Achievement Award.

President of Rwanda HE Paul Kagame received a Special Recognition Award for his leadership and vision. He thanked Rwandans who have sacrificed a much to put Rwanda where it is today: “Rwandans have made me the kind of leader that I am and they have given me the strength that has added up to taking our country forward.” Bob is back, as Bob Diamond the former CEO of Barclays Bank who quit after the bank faced global scandals and fines, was in the deal that was awarded equity deal of the year. Andrew Alli of the African Finance Corporation won African Banker Icon.

This year the judges – I was again privileged to be a judge for some categories – again awarded Nigeria’s GT Bank as African bank of the year. South Africa’s Rand Merchant Bank is investment bank of the year and South Africa’s Nedbank won both an award for innovation in banking and the socially-responsible bank of the year. Mastercard won a well-deserved award for financial inclusion.

Investec Asset Management won fund of the year and State Bank of Mauritius won retail bank of the year. Banque Islamique de Mauritanie won best Islamic finance initiative.

The awards also recognized smaller financial institutions and those pioneering in challenging environments. Trust Merchant Bank, an independent commercial bank operating in DR Congo, won Best Bank in Central Africa. Ecobank Mali won Best Bank in West Africa after Mali successfully transitioned back to its historic democracy after a 2012 coup that crippled the economy. Stanbic Zimbabwe beat tough competition from bigger banks to become Best Bank in Southern Africa, despite challenging economic conditions. Bank of Kigali scored in East Africa and Morocco’s Banque Centrale Populaire in North Africa.

Two landmark deals were rewarded. Citigroup Global Markets won equity deal of the year for helping Bob Diamond, previously of Barclays Bank, in the $325m initial public offer (IPO) of his new investment vehicle, Atlas Mara Co-Nvest. Standard Chartered Bank won debt deal of the year for the $3.3bn finance facility for Dangote Group petrochemical plan, building the continent’s largest refinery, petrochemical and fertilizer plant.

The winners of the 8th African Banker magazine’s African Banker Awards were announced at a prestigious ceremony on 21 May at the Kigali Serena Hotel, linked to the African Development Bank summit. Among the guests were HE Festus Mogae, former President of Botswana, and many ministers of finance and bank CEOs were also present.

Omar Ben Yedder, Publisher of African Banker and IC Publications, commended the achievement by banks: “Here in Kigali.. we have witnessed the transformation of a country. Since we have launched the awards we have witnessed the transformation of an industry. There is no room for complacency because there is much room for growth and development to achieve the transformation we all desire and work towards. But seeing local African banks finance and structure international deals is a step forward and unimaginable a decade back. And I am delighted to see three women pick up three coveted individual awards. Congratulations to them all!”

The African Banker Awards are organized by African Banker magazine and BusinessinAfrica Events (BIAE). It is a landmark event that celebrates excellence and best practices in African banking and finance.

Winners
Special Recognition Award: HE President Paul Kagame

Lifetime Achievement Award: Elizabeth Mary Okelo

African Bank of the Year: GTBank

African Banker of the Year: Vivienne Yeda, Director General, East African Development Bank

African Banker Icon: Andrew Alli, CEO, Africa Finance Corporation

Central Bank Governor of the Year: HE Linah Mohohlo, Botswana

Finance Minister of the Year: Hon Armando Manuel, Angola

Investment Bank of the Year: Rand Merchant Bank

Award for Innovation in Banking: Nedbank

Socially Responsible Bank of the Year: Nedbank

Award for Financial Inclusion: MasterCard

Deal of the Year – Equity: Atlas Mara Co-Nvest, Citigroup Global Markets
Deal of the Year – Debt: Financing Facility, Dangote Group Petrochemical Plant, Standard Chartered Bank

Fund of the Year: Investec Asset Management

Best Retail Bank in Africa: State Bank Mauritius

Best Islamic Finance Initiative: Banque Islamique de Mauritanie

Best Bank in North Africa: Banque Centrale Populaire
Best Bank in Southern Africa: Stanbic Zimbabwe
Best Bank in East Africa: Bank of Kigali
Best Bank in West Africa: Ecobank Mali
Best Bank in Central Africa: Trust Merchant Bank

Mortgage Bank of the Year: Nigerian Mortgage Refinance Company