A proposed merger of Atlas Mara’s BancABC with Mozambique’s fourth-largest bank, Moza, is awaiting final approval from the Bank of Mozambique, Zitamar News has learned.
The deal, which will see pan-African banking company Atlas Mara buy 49% of Moza from troubled Portuguese lender Novo Banco, was first reported by Bloomberg in May 2015 but did not go ahead as Novo Banco was itself being sold, a process which has also been delayed.
Novo Banco, created from the ruins of Portugal’s bankrupt Banco Espirito Santo, has recently run into further problems which may have precipitated its decision to sell its 49% stake in Moza, known as Moza Banco until it rebranded in 2015.
Atlas Mara, set up by former Barclays CEO Bob Diamond and Ugandan entrepreneur Ashish Thakkar in 2013, bought Botswana-based BancABC in 2014, giving it a foothold in Mozambique as well as Zambia, Zimbabwe, Tanzania and Botswana.
The deal to merge Moza with BancABC is reminiscent of a deal Atlas Mara did in Rwanda in 2015, when it bought a minority stake in Banque Populaire du Rwanda and merged it with a smaller bank it had already bought, resulting in majority ownership of the larger entity.
Following approval of the deal, Moza will take over the BancABC operation in Mozambique, but Atlas Mara will be the majority shareholder in the expanded bank, Zitamar News understands. It is unclear whether a further capital injection will be required for Atlas Mara to secure the majority shareholding.
Zitamar News understands last-minute negotiations were taking place last week between Atlas Mara’s management and Paulo Ratilal, Moza chief executive and son of the bank’s main shareholder, former Bank of Mozambique governor Prakash Ratilal.
The merger will cement Moza’s position as Mozambique’s fourth-largest bank, pulling away from 5th-placed Barclays and approaching 3rd-placed Standard Bank. The two biggest players, Millennium Bim and BCI, both have around double Standard Bank’s assets, according to Bank of Mozambique figures published in 2015.
An IMF paper on Mozambique’s banking sector published in January this year expressed concern that the sector is too concentrated – noting that in 2011, the top 3 largest commercial banks accounted for 83 percent of total bank lending.
Atlas Mara is reportedly also looking at a purchase of Finance Bank Zambia, where it also owns the local operation of BancABC.
source: zitamar news
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