The FirstRand banking group is in talks with Mozambique’s BDC bank, possibly bringing to three the number of local banks that operate in Mozambique, South Africa’s third-most important trading partner in Africa.
Other South African banks with a presence in Mozambique are Standard Bank, which has a stake in Banco Standard Totta, and Absa, which has an 80% stake in Banco Austral.
Following its acquisition of Absa, Barclays now has a presence in 13 countries on the continent, including overlapping operations in Tanzania and Zimbabwe. Absa is in the process of buying the African interests of its parent company.
FirstRand already has a presence in SwaziÂland, Namibia, Lesotho and Botswana, while Standard Bank has a footprint in 18 countries in Africa.
BDC services small and medium-size companies and low and middle-income consumers. The bank is 62%-owned by Portugal’s Caixa Economica Montepio Geral and 18,5% belongs to Mozambican businessman Hermenegildo Gamito’s GCP group. The remaining stake is held by a number of Mozambican business people.
Trade between Mozambique and South Africa was R5,6-billion in 2003, R5-billion in 2004 and R6,4-billion last year. The trade balance is heavily tilted in South Africa’s favour: last year South Africa exported R6,4-billion worth of goods and imported only R200-million worth of goods.
With the meltdown in Zimbabwe continuing, investors are looking to Mozambique for opportunities. In the past 10 years Mozambique has recorded high economic growth rates averaging 8%. These are expected to remain at about 7%.
FirstRand spokeswoman Sam Moss acknowledged the bank was in talks with BDC and other stakeholders. “We are in discussions with a number of parties. BDC is one of them and the discussions are continuing,” said Moss.
“We are attracted to Mozambique because of its proximity to South Africa and the fact that it is growing fast,” she added.