Nigerians banking on getting foothold in Nam

NIGERIA’S Platinum-Habib Bank (Bank PHB) has given the Bank of Namibia (BoN) a letter of commitment, agreeing to additional requirements, in their on-going quest to become the fifth commercial bank in Namibia.

In the letter, delivered earlier this month, Bank PHB Managing Director/Chief Executive Office Francis Atuche assures BoN Governor Tom Alweendo that his bank is not driven by opportunistic short-term profits.
He also promised the BoN chief that, should adverse business conditions hurt local operations, the parent company will bail Bank PHB Namibia out financially.
The BoN has remained vague on the issue, only willing to confirm that they did indeed receive an application for a banking licence from Bank PHB and that they are currently reviewing it.
According to Nigerian High Commissioner Prince Adegboyega C. Ariyo, the BoN has set more requirements, on top of their already stringent ones, for Bank PHB to enter the Namibian market.
In an interview with The Namibian, Ariyo said the BoN required Bank PHB to increase it capital base by US$10 million more. In addition, the BoN wanted clear indications of what will happen if the bank goes under.
‘The BoN didn’t demand these requirements from Absa when they wanted to open up in Namibia. I can’t see the justification for this,’ Ariyo said, adding that Bank PHB ‘at first felt as if they’re not wanted by Namibia’.
Bank PHB is not the only Nigerian bank interested in Namibia.
First Bank of Nigeria has also approached Ariyo in this regard. However, he feels it’s futile to pursue this opportunity while Bank PHB’s licence application drags on.
Bank PHB started testing local waters after Ariyo invited them to Namibia for an investment conference in 2007. ‘At the time, the authorities felt that there was room for at least 12 banks in this economy.’
Ariyo said Bank PHB comes with the assurance of credible management.
‘We don’t want another City Savings and Investment Bank (CSIB).’
Bank PHB furthermore submitted a business plan and a due diligence report to the BoN. In their business plan, Bank PHB provides for a capital base of N$194 million during their first year which, according to their calculations, will grow by 131 per cent to more than N$400 million within three years.
The bank will be based in Namibia, with its own local headquarters and systems base. Bank PHB eventually intends owning between 70 to 75 per cent of the shares in the local bank with the remainder in Namibian hands.
In its original business plan, Bank PHB wanted to open 13 branches across Namibia. However, the local authorities felt that would be too much, Ariyo said. Working on four branches, he foresees Bank PHB will provide some 200 ‘quality jobs’ to Namibians.
According to Ariyo, Bank PHB can open its doors within three months once it gets the go-ahead from the BoN. Representatives already scouted for offices last April.
He said the Nigerian bank is not in the least deterred by the global financial crisis. The bank, one of the biggest in Nigeria, has a capital base in excess of US$2 billion. Expanding to Namibia forms part of a Pan-African banking development drive.
Ariyo sees Bank PGB’s desire to expand to Namibia as an endorsement of the country’s viability as an investment destination. Another bank in Namibia does not just constitute a much-needed investment, but will also increase competition amongst commercial banks which will benefit the consumer, he maintained.
Both the Namibian and Nigerian governments approve of the move, he added.
‘The earlier the matter is favourably resolved, the more opportunities for expansion will open up and the more economic engagement there will be between Namibia and Nigeria,’ Ariyo said.
jo-mare@namibian.com.na