The Asian Banker FSI Investment Forum (FSIIF) Africa 2016

Facilitating Investors to make informed choices

In recent years the financial services industry in Africa as seen significant growth and is considered one of the sectors in Africa with huge potential. Over a decade ago, the sector was largely undetected and underinvested in however, the world has begun to recognize the untapped potential. Policymakers across the continent have recognized the significance the banking sector plays in the reduction of poverty by providing funding for small businesses, secure networks for transactions and providing jobs.

The growth of Pan-African banks such as Ecobank present in 36 countries, United Bank for Africa in 22 countries, Standard Bank Group in20 countries at the close of 2015, has attracted the attention of regional players from the Middle East and Asia.Qatar National Bank is now the leading stakeholder in Ecobank and the largest bank by asset size in the Middle East region. Tracking the flow of goods across Asia, Middle East and Africa has led to increased focus on the transaction banking and supply chain finance framework required to grow the business in Africa and the expansion of banks outside of their home markets.

Governments and central banks have taken significant steps to introduce the required regulatory frameworks, institutions and infrastructure in order to standardize the banking sector and ensure bank practices are aligned with the new wave of stringent international regulations. The introduction of credit bureaus in selected countries in East and West Africa will also assist the banks in stronger risk management of their credit portfolio enabling them to earn higher returns on riskier investments.

Africa has yet to unleash its full potential by capturing the underserved segments of the population and through a wide range of product offering. Insurance products have been largely left in the hands of the international banks on the continent however, the insurance business offers sustainable profitable opportunities for investors with a healthy risk appetite.  Innovations in product offering and delivery of services also poses huge investment potential.

Another trend driving investments across the FSI sector is bank’s acquisition of new technologies and Fintech especially on the so called ‘game changers’ with particular focus on big data & analytics, mobile and wireless, payments, risk management, security, and compliance. Banks straddle between providing banking services and becoming IT developers with selected banks having a full in house IT development solution.

This dialogue will focus broadly on the following goals:

• Investing into domestic banks
• Co-investment opportunities
• Buy & selling of distressed FSI assets & debt
• Acquisition of banc assurance businesses
• Challenges surrounding M&A deals such as financial due diligence
• The rise of disruptive & game changing technologies