Banking
What is the Future of Private Banking in Africa?
Africa’s growth story may have been hampered by COVID-19, and whilst challenges remain, there are still investment opportunities and wealth creation taking place.
There are, at present, around 136,000 high net-worth individuals (HNWIs) living in Africa, with total private wealth held on the continent amounting to $2 trillion. Those numbers are expected to keep growing too. In fact, the number of HNWIs in Nigeria alone is expected to grow 40% over the next decade[1].
That means private banking in Africa, and in Nigeria, the continent’s biggest economy, will only become more important. Recent reports suggest that wealth in Africa is poised to grow at a stronger level than many other regions around the world.
But, as the number of people needing private banking services grows, these services will also have to adjust to their changing wants and needs. Among other things, that means helping clients with tangible investments diversifying away from their local markets, offering Discretionary Portfolio Management, and balancing traditional and digital banking services.
According to Amol Prabhu, Market Head: Africa at Barclays, families within these brackets, especially those with established wealth, are also looking for access to global networks and corridors, the ability to invest in other entrepreneurs on the continent and globally, and ways to ensure that their children can be educated overseas.
‘Not just private banking’
Prabhu notes that providing access to those global networks often means going above and beyond traditional private banking expertise.
By way of example, he says, “We’ve got a family based in Nigeria who are in the goods trading business. The entire family – parents, all three children and their spouses – bank with us. Their business is headquartered in Nigeria but extends across the corridor to Dubai and India, where it is managed by their extended family who happen also to bank with us. Having the ability to support these global families in every location as well as both individually and holistically is critical.”
“Also, as the client’s business grows, their needs change over time and we are well positioned through our Corporate and Investment Banking offering to provide this support. It’s the ability to provide clients with coverage that’s not just multi-location but also multi-business, multi-product and multi-generational that’s important,” he adds. “These types of clients have got complex, global needs, so that’s where real value can be added. Few banks provide this coverage and even fewer do it very well.”
According to Prabhu, another specific area that African clients look for help with is prime and super prime UK real estate.
“That can be people wanting to have a second home in London and spend more time there or wanting London properties as part of their investment portfolio,” he says. “And generally, because people are spending more time in these houses, they want bigger properties too.”
This attraction to the UK, he says, is overlaid by the fact that many clients expect that their children will live, work, or study in the UK at some point in their lives, as many of them have done.
The rush for direct assets
Another significant trend, Prabhu points out, is the growing demand for direct assets.
“What that means is that entrepreneurial families like to invest in other entrepreneurs,” he says. “It can be high-growth technology companies: fintech, medtech, agritech or ones focused on climate change and other issues.” The number of African tech start-ups receiving funding grew six times faster (46%) than the global average (8%), between 2015 and 2020[2], demonstrating the interest in this sector.
“These kinds of companies are typically looking for funding anywhere from $1 million to $200 million and we open it up to our ultra-high net-worth and global families within the Private Bank to give them the opportunity to invest.”
Crucially, these companies are all private, meaning that these investments are not open to the general, public market. By facilitating these investments, Barclays Private Bank not only helps their clients make more meaningful investments on the continent but also help grow the continent’s entrepreneurial ecosystem.
Classic portfolio management
While those trends will undoubtedly shape private banking in Africa for some time to come, Prabhu points out that there’s still significant value in classic asset and portfolio management. The key, however, is to have managers and methodologies that can thrive even during periods of global political and economic uncertainty.
“If you’re sitting in Lagos and you’ve got a portfolio in the UK or Switzerland, you are literally thousands of miles away from your hard-earned money,” he says. “You have got to have real trust in the institution, the portfolio team and their underlying methodology that your money is being managed properly.”
Talent development is crucial
In order to ensure that all those needs are fulfilled, however, the right level of talent is essential.
“A high-quality talent bench is vital,” says Prabhu. “And to service African private banking clients effectively, they should either be from Africa, have lived on the continent, or have a decade+ of Africa private banking experience. Having that deep experience and a high-quality service mentality is critically important to show and deliver value.”
Ultimately, he points out, you are helping people who are typically very good at what they do but may have very little banking and investment knowledge and / or time to look into these things.
“At the end of the day, our role is to help and guide clients to make the right kinds of decisions in the financial context,” he says. “And having the right talent and skills on-hand as well as a quality institution behind you is crucial to that.”
As the number of high net worth and ultra-high net worth individuals in Africa continues to grow, having the right partners with those skills and knowledge will only become more important.
[1] Source: Africa Wealth report
[2] Boston Consulting Group: Overcoming Africa’s Tech Startup Obstacles
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking6 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN