Two leading African commercial banks have expressed interest in setting office in Botswana, BG Business has learnt. Nigerian banking group-United Bank for Africa (UBA) and Kenya’s Equity bank have publicly stated their desire to establish branches in the highly competitive and profitable industry, although it was not clear if they had already approached licensing authority Bank of Botswana (BoB).
A senior Botswana official who formed part of a delegation to South Sudan December, which later promoted the country in Kenya, this week, stated that Equity Bank Managing Director, Dr James Mwangi had expressed strong interests in setting up in the landlocked country.
Mwangi, said the source, had not stated in details when they are expected to have approached relevant authorities such as BoB for formal applications. Botswana Investment and Trade Centre (BITC), the country’s investment promotion unit is about to make formal advances aimed at luring the bank to the country, it has been revealed. Equity Bank is financial services provider headquartered in Nairobi, Kenya.
It is one of the 44 commercial banks licensed by the Central Bank of Kenya, the national banking regulator. As of October 2010, Equity Bank had the largest customer base in Kenya, with over 5.7 million accounts. Apart from Kenya, the bank has banking subsidiaries in Rwanda, Uganda, Tanzania, and South Sudan among others. On a related matter, UBA’s Chief Executive Officer, Philips Oduoza told Bloomberg last year that they also have interest in Botswana, Ethiopia and Rwanda. Oduoza stated they are yet to make any application. Based in Lagos, the group has subsidiaries in 19 African countries. The company also has operations in New York, London and Paris. At press time on Wednesday, the bank had not responded to BG Business questions on their intention to expand into Botswana. However, the bank’s first attempt to enter Angola was rejected, as it was told to reapply.
“Angola is a fairly complex market and they take their time and their processes and methodologies are slightly different from those of other African countries,” said Oduoza. As of December 2011, UBA’s total assets were US$12.3 billion. Should the two banks succeed and set shop here, they will be joining an already mature banking industry, which is largely controlled by British and South Africa based banks. Standard Chartered Bank Botswana, Barclays Bank Botswana, First National Bank Botswana and Stanbic are the top four lenders in the country. Currently, BoB has licensed 11 commercial banks, after the exit of diamond focussed ABN AMRO last year.
Letshego, a listed micro-lender is also planning to re-apply for a banking license, after an earlier one was disapproved.