BY PHAKAMISA NDZAMELA, 09 JUNE 2014, 11:03
Absa Group CEO Maria Ramos. Picture: MARTIN RHODES
JOHANNESBURG-headquartered Barclays Africa Group has said it will continue controlling two competing independent banks in Tanzania for the foreseeable future, raising questions about the efficiency and cost of running two banks in one country.
The arrangement in Tanzania also raises questions about Barclays’ "One Bank in Africa strategy".
Barclays Africa Group, which is headed by Maria Ramos, owns a majority stake in National Bank of Commerce in Tanzania, and Barclays Bank Tanzania.
The Tanzanian government and the International Finance Corporation are also shareholders in National Bank of Commerce.
Before Absa Group acquired the Africa operations from Barclays in an R18bn deal in 2012, it owned 55% of National Bank of Commerce in Tanzania.
The merger led to Absa Group taking on Barclays Bank Tanzania, leaving it invested in two competing banks in Tanzania.
According to the Barclays Africa Group’s 2013 annual report, National Bank of Commerce has 463,000 customers, 272 automated teller machines (ATMs) and 52 branches in Tanzania. Barclays Bank Tanzania has 87,000 customers, 42 ATMs and 24 branches.
The last set of data on Tanzania published by Barclays Africa Group showed Barclays Bank Tanzania had a cost-income ratio of 110.1% in the first half of 2012 and reported a loss. The return on equity was -19.5%.
The 2012 financial statements of National Bank of Commerce show the bank had net income after tax of 2.2-million Tanzanian shillings. One South African rand is equal to about 158 Tanzanian shillings.
The return on ordinary shareholders’ funds was 1.65%.
"The only reason why you would keep them separate is if they segment the customers they serve," Sanlam Investment Management Global fund manager Kokkie Kooyman said on Friday. "But it does not make sense to run separate banks for a long period. You are inefficient in terms of capital, staff, liquidity and you must be inefficient in terms of your branches. You might want to scale some of your branches."
The National Bank of Commerce offers retail, corporate and treasury services. Barclays Bank Tanzania offers retail and corporate banking services including cash management and trade finance services.
Asked about the Tanzania arrangement, a Barclays Africa spokesman said: "Barclays Bank Tanzania Limited (BBT) and National Bank of Commerce (NBC) operate separately and compete in accordance with local legal and regulatory requirements.
"This arrangement, operating BBT and NBC as independent entities with separate boards and management teams, will continue for the foreseeable future."
http://www.bdlive.co.za/africa/africanbusiness/2014/06/09/barclays-to-keep-two-tanzanian-banks
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