ATLAS Mara, owners of Pan-African banking group BancABC say they are looking to expand into seven more countries in sub-Saharan Africa through acquisitions, taking advantage of opportunities offered by weaker local currencies against the dominant United States dollar.
Atlas Mara, which combines Diamond’s Atlas Merchant Capital LLC and African entrepreneur Ashish Thakkar’s Mara Group Holdings Limited, made a splash in Zimbabwe last year by buying ABC Holdings — which owns BancABC and has presence in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
It also held a 10 percent stake in emerging Zimbabwean private equity firm Brainworks Capital, which it sold for US$8,72 million in June this year.
Chief executive John Vitalo told the Financial Times owned This Is Africa on the sidelines at the World Bank/International Monetary Fund annual meetings in Peru at the weekend that the group already had a footprint in seven African countries and has targetted seven more, although he declined to name them.
“As you know sub-Saharan Africa is a big place so we have a very specific target of 14 countries where we aim to have our footprint. We are in seven today so that leaves seven. Unfortunately we haven’t publicly disclosed what the other seven are,” he said.
The weakening local currencies against the USD made acquisitions easier as the buy-outs are priced in domestic currencies, Vitalo said.
“This environment is actually good for us because we are looking for acquisitions to establish Atlas Mara’s footprint in sub-Saharan Africa….and it makes our dollars go further when we are looking for acquisitions and pricing the acquisitions in domestic African currency,” he said.
He added: “Our banks are managed in such a way that we are not lending hard currency to people who are not earning in hard currency so we are not concerned by the risk management impact or anything like that.”
Vitalo noted that while Africa was not immune to the economic challenges the rest of the world is facing but said that “does not take away from the underlying thesis on which Atlas Mara is build on, the trends are not going away and these are decade long trends and Africa will continue to be one of the economic bright spots nonetheless.”
Atlas Mara registered $4,1 million after tax profit in the half-year to June compared to a loss of US$3,2 million reported for the prior year period. In the full year to December 2014, the group made a US$63,1 million.
Thakkar said Atlas Mara was looking at Africa in the long-term, noting that its fundamentals were among the best in developing regions.
“Atlas Mara never had a short-term vision, we always had a long-term vision and our vision has been pretty bold from the beginning, which is we want to become Africa’s premier financial institution. By that we don’t mean the biggest, we mean the best so our fundamentals remain solid so does our strategy,” he said.
“We are not immune but however there is still growth across the continent versus a lot of other emerging markets and developing markets so I think Africa’s fundamentals are still right and the people have a long-term perspective as we do, I think is people there are huge opportunities.”
The group already has a presence in the Southern Africa Development Community (Sadc), the East African Community and Nigeria, with a target to enter into the rest of the Economic Community Of West African States (Ecowas)
“Naturally we have always seen it as a regional strategy. Intra Africa trade is still 12 percent whereas in Europe is about 70 percent so when you think about the blocs there is great potential. We have created a strong presence already in the SADC region, we created a foothold in the East African Community and Ecowas is obviously very important so we are very excited about all three in their own ways,” said Thakkar.
“Naturally the Ecowas region and Nigeria specifically, the East African region have huge growth potential and they have been very quick with their integration programmes and SADC, especially with the recent findings of so many different natural resources and peaceful transitions in governments just shows you there is a lot of scope for growth opportunities.”