Barclays & Diamond compete for Africa’s Banking promise
By Steve Slater and Helen Nyambura-Mwaura
"If you operate efficiently and pick up market share then potentially it's a very profitable strategy, but there is a lot of fragmentation. Each country has different systems so it's very management intensive, but openings are there."
OPEN THE ATLAS
EX-MARINES & HEDGE FUNDS
Less than a third of sub-Saharan Africans have bank accounts, and an even lower percentage of firms hold a loan or line of credit.
As well as huge untapped markets, margins are attractive, with the spread between borrowing and lending rates over 10 percent in many countries, compared to 2 percent or less in many western countries.
"There's high growth in Africa and it's an underpenetrated market. It should also have a cost of capital advantage over the domestic banks, which is very significant and if he (Diamond) executes well it will only get stronger over time," the investor said, who asked not to be named as Atlas Mara is raising funds.
TECHNOLOGY BOOM
Barclays, which has 45,000 staff and 12 million customers in Africa, made a 1 billion pound profit there last year. Although its returns are short of target, the Africa business required 4 billion pounds of capital, or 8 percent of the group total, while it accounted for 16 percent of profit, adding to its attraction at a time when capital is scarce.