AFRICAN CONSOLIDATION REDUCES SYSTEMIC RISK

摘要

Many economies in sub-Saharan Africa have been faced with subdued economic growth rates, which makes organic growth for local institutions hard to come by. In response, there has been a wave of consolidation among banks looking to benefit from economies of scale. More mature banking systems, such as those in Nigeria, Angola and South Africa, have seen mergers aimed at supporting long-term profitability and synergies that could help reduce funding costs. Several such deals have happened recently, with Nigerian top-tier lender Access Bank scooping up smaller rival Diamond Bank. Low valuations have plagued many regional banks, particularly in Nigeria, which simultaneously makes it harder for banks to access capital through rights issues and makes them more attractive takeover targets for well-capitalised peers.