The Absa Group Limited, South Africa’s largest financial services organization, providing services for personal, commercial and corporate customers has announced over the weekend plans to start an office in Nigeria, in a bid to accelerate growth outside its home market.

According to Mr. John Vitalo, chief executive officer of Absa Capital, the bank is in the process of getting all the necessary regulatory approvals to open a representative office in Nigeria which he said had been a limiting factor. Absa boss said it had gained all the necessary internal approvals, adding that the bank intentions are known to the regulators.''

ABSA is following its rival Standard Bank Group Ltd, which targeted Nigeria with its acquisition of Nigeria’s IBTC Chartered Bank now Stanbic Bank, where first-quarter economic growth was three times faster than at home. It would be recalled that Chris Newson, chief executive officer, Stanbic IBTC Bank, said at the rebranding of Stanbic IBTC that the two franchises have been successfully merged into a single entity.
“We are very excited to finally launch as a single brand to the market and tangibly demonstrate the benefits of being a strong Nigerian bank with international muscle and expertise, from which our customers and shareholders will benefit significantly.”

The new entity has a capital base of N78-billion, which it considers more than adequate for its operations in the country, as the bank has no plan to raise fresh capital in the near future.
But industry sources revealed that the entrance of ABSA into the Nigerian banking industry signals the fulfilment of the Barclays Groups’ ambition to manage Nigeria’s foreign reserve. Since ABSA is largely owned by UK’s Barclays Group.

CBN’s Head, Corporate Affairs, Mr. Festus Odoko, said the decision to entrust some portion of the reserves to the 14 global asset managers and Nigerian banks was reached at the meeting of Investment Committee of the CBN in, October, 2007.
He said the three other foreign institutions, namely: Barclays Bank (DCO), Deutsche Bank AG and Pacific Investment Management Company (PIMCO) were technically qualified but could not be awarded mandates because they did not have local partners, adding that their ambition may be fulfilled once the apex bank grants the final operating licence to ABSA which is a subsidiary of UK’s Barclays Group.

Only recently, the Lord Mayor of London, Lord Alderman Lewis, said: “It was a criminal offence to disallow foreign banks and other investment related institutions to operate in Nigeria. He said Nigeria need to liberalize her market by allowing more foreign firms to come in, that was the reason London has been the global financial centre.

But Central Bank of Nigeria (CBN) Public Relations Officer, Mr. Festus Odoko, said CBN has not banned foreign banks from Nigeria, but they only required to meet all the conditions that the CBN has stipulated for foreign banks that want to establish in Nigeria.”

He said: “Look at Citibank, they have been in Nigeria for over 20 years and how many branches they have, Citibank is only in Lagos, Port Harcourt and Abuja, wondering whether that was how they are going to help our development? The position of CBN is that if any foreign bank wants to come to Nigeria, such a bank is free, but to buy any local bank is what CBN is restricting, foreign banks can buy equity in Nigerian banks but such equities must not be big enough to take over the bank.”