Located in the two largest cities in Africa's biggest economy, Johannesburg and Cape Town, the primary functions of the South Africa Offices are to promote Mauritius as an international financial and business destination and AfrAsia Bank Limited as the banking brand of choice.
Corporate South Africa's investments into Africa
On the corporate and institutional front, South Africa remains one of the dominant investors on the Continent. According to the latest World Investment Report, South Africa recorded a 4.3% rise in FDI to USD 6.9bn during 2014, making it a leading outward investor, particularly into the rest of the African Continent. South Africa's investments into more than 40 African countries range beyond traditional mining, telecommunications, banking and travel. Other successful South African businesses with African operations are involved in insurance, construction, chemical, pay-TV, food and beverage as well as the pharmaceutical sectors. Every year growing numbers of African consumers shop at South African retailers such as Shoprite or Massmart stores. Many of these companies engaged in trading in Africa have invested via Mauritius – or use Mauritius as an international treasury centre.
Private Banking in Africa
According to New World Wealth's Africa 2015 Wealth Report, the number of HNWIs in Africa increased by 145% between 2000-2014, comparing very favorably with the worldwide HNWI growth rate of 73% during the same period. Moreover, these numbers are expected to rise by a further 45% by 2024. Clearly there is a correlation between economic growth and the creation of a successful and wealthy entrepreneurial class. With the African Continent set to become one of the world's fastest growing regions over the next 10 years, there will be a concomitant rise in the demand for banking and investment products and services which augurs well for those providing private banking to the African clientele.
The Representative Offices have been capitalising on 3 main trends:
- continued interest in expanding into new markets where there is growing consumer demand. Countries in SADC and COMESA are of particular interest. Being a member of both blocs and offering a network of double-taxation agreements, IPPAs and other advantages, Mauritius is an ideal platform to facilitate accessing these markets
- managers of listed and unlisted funds continue to be attracted to Mauritius as a base for their operations, and
- like corporates, there are individuals who similarly seek international diversification of their wealth and access to private banking products.
The Representative Offices' local presence combines well with the Bank's competitive products and services enabling AfrAsia Bank Limited to successfully compete for international banking in the markets in which it operates.
Since inception, the strategy has been to retain the services of seasoned bankers who are well grounded in the local market and also have the ability to inform prospects about international banking through Mauritius. This ranges from being able to discuss with global business companies as well as speaking to individuals about the private banking platform in Mauritius.
Key success and future outlook
Tangible and intangible benefits accrue to positioning ourselves in
one of Africa's largest economies.
- Being situated in the Continent's banking and stock market hub provides access to high quality local and international corporates as well as fund managers
- Increasing acceptance of AfrAsia Bank Limited as a regional Bank of substance is evidenced by the profile of African companies and intermediaries choosing to do business with the Bank
Each year, the South African Representative Offices continue to contribute to the Bank's expansion into African and other markets.
The team in South Africa. From left to right; Ravi Teji, Vanessa Sabbatini (consultant), Colin Grieve, Anne Ferriera, Lise Tayler and Dennis Shoko
The Bank's presence in London reflects the city's importance as a centre for African-focused capital flows. It is also home to a large proportion of the major African private equity groups and our London Representative, Garry Sharp, himself has deep experience in African private equity stretching back nearly twenty years.
The key role of the Representative Office is to act as a networking and contact centre, enhancing our relationships with London financial institutions, advisers and intermediaries, and with clients and contacts who pass through the city. The Bank also liaises closely with the London offices of Mauritius-based management companies and similar partners.
Key achievements in the last twelve months have included:
- deepening AfrAsia Bank Limited's links with London-based, Africa-focused Private Equity funds. The Bank now provides banking services, including bridging loan and portfolio company facilities, to a significant and growing number of these funds and the London connection has helped accelerate this progress.
- cooperation with International Management Companies. A growing number of AfrAsia Bank Limited's IMC partners are opening London offices. The Bank is collaborating closely on joint business development activities with these offices to offer total solutions to London-based clients.
- developing relationships with major international conglomerates with African exposure. As Mauritius becomes more established as the natural offshore base for international investment in Africa, these links are helping to promote the Bank's positioning as their natural Mauritius banking partner.
- broadening private banking coverage, the presence of a London Representative has strengthened the Bank's appeal to High Net Worth Individuals based in London.
The Financial Year 2014/15 was marked by the closure of the Bank’s Zimbabwe operations, despite all efforts made to salvage them. This happened against the backdrop of deteriorating macroeconomic conditions and a continued liquidity crunch in the banking sector.
In February 2015, the board of AfrAsia Bank Zimbabwe Limited (ABZL) decided to surrender its banking licence. Despite the writeoff of this investment, AfrAsia Bank Limited continues to maintain a strong capital based of MUR 4.9bn, demonstrating the resilience and financial strength of the Bank.