BOB Diamond’s co-founded Atlas Mara wants banking subsidiaries to be among the top three in markets they operate in as the group aims to establish a premier financial service entity in sub-Saharan Africa.
CHIEF BUSINESS REPORTER
Atlas Mara controls 95,8% in pan-African banking group ABC Holdings (ABCH), which has operations in Zimbabwe, Zambia, Botswana, Mozambique and Tanzania.
Atlas Mara will make an offer for the remaining 4,2% later this month to wholly own the group which would resulting in delisting from the Zimbabwe and Botswana stock exchanges.
ABCH chief executive officer Douglas Munatsi said the new shareholder was ambitious and wants operations to top in markets they operate in.
“We have been saying that we want to be in the top five. They are saying top five is not enough maybe top three. They are far more ambitious than us. They have much greater capacity to mobilise capital,” he said.
To attain that, ABCH would capitalise its subsidiaries in Zimbabwe, Zambia and Botswana to reach $100 million in capital thresholds and be able to write more business. Subsidiaries in Mozambique and Tanzania would be capitalised to the tune of $50 million each.
Munatsi said ABCH won’t venture into the South African banking market saying the returns were lower than other markets on the continent. He said South Africa would remain as the home of the group’s head office.
“We need to raise more capital than they [Atlas Mara] have raised [so far], which is a big ask,” Munatsi said.
BancABC will remain the chosen brand for the Sadc region, Development Bank of Rwanda (BRD) in Rwanda will retain the same name and there won’t be any wholesale changes to the corporate identity or structure.
Atlas Mara will have 100% in a commercial bank to be formed in Rwanda. The bank will be formed through the transfer of BRD assets and liabilities to the new entity.
Atlas Mara will acquire 100% shareholding in the commercial bank at a price of between $10 million and $25 million. The entry into Rwanda will be Atlas Mara’s gateway to East Africa.
Munatsi said there won’t be much change on the ABCH board “but because of the London listing all subsidiaries have to comply with the London rules”.
“If anything, we expect there will be a better approach in some of the things that we are doing,” he said.
Munatsi said the whole idea of having Atlas Mara as a shareholder was to raise the size and volume of business to the next level.
“The plan is to raise the size of business and footprint to a size where all these operations will be first tier business,” Munatsi said.
“The transaction has offered us an opportunity to grow business in Sadc region.”
In March, Atlas Mara co-founded by Diamond and Ashish Thakkar announced that it would buy a controlling shareholding in ABCH and African Development Corporation (ADC) to establish a financial services group in sub-Saharan Africa. The transactions were concluded last month.
Atlas Mara sees its strategy in sub-Saharan Africa’s financial services sector as a “positive disruptive force” buoyed by a strong capital position and acquisitions.
As at June 30 2014, Atlas Mara held $306 million in cash and cash equivalent investments of which $286 million was invested in United States Treasuries and mutual funds holdings, among others.