Bob Diamond's back and banking on Africa

The former Barclays boss makes his return to banking, with the $265m purchase of Zimbabwe and Botswana-listed BancABC. Look out Africa!

Last Updated: 04 Mar 2016

In a story that could have been mistaken for an April fool’s prank, Atlas Mara, Diamond’s London-listed investment vehicle, announced the cash and shares deal this morning. It’s the group’s first investment since raising $325m last autumn, and Diamond’s first major deal since he was kicked out of Barclays in 2012.

Zimbabwe of course is infamous for the increasingly quixotic and divisive behaviour of its nonagenarian president, Robert Mugabe. The Diamond/Mugabe connection is proving a gift for mischief-makers, with the inevitable wisecracks doing the rounds, to whit:

Q: How do you think they will cope with the lack of corporate governance?
A: I expect president Mugabe will manage just fine.

But joking aside, the move might be a pretty smart one by Diamond, who for all his oft-evidenced faults has always had an eye for the main chance. Sub-Saharan Africa is being touted by many as the next big growth opportunity, and its banking sector is fragmented, mired in politics and unprofitable. Ripe for a makeover in other words.

It’s true that we have heard all that before, and also that while Zimbabwe remains in the hands of Mugabe progress is hard to imagine. But he was 90 in February and can’t live forever: in the meantime there is plenty of business to be done elsewhere in the region.

Only a quarter of people in Sub-Saharan Africa have bank accounts, and a mere 5% have credit cards. BancABC - which operates in Mozambique, Tanzania and Zambia - made profits of $29m on revenues of $156m last year. Even a modest uplift in those penetration figures could yield big bucks for Diamond and his backers.

Of course there are an a awful lot of ‘what ifs’, but as Diamond no doubt appreciates more than most, it’s easier to play the long game when you’re no longer running a public company...


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