FNB ventures further into African market

Tamlyn Stewart

Tamlyn Stewart

First National Bank has "hastened the pace" of its expansion into other African countries with a $22,5million (about R228million) investment in expanding its operations into Zambia by the second quarter of this year.

The group said yesterday that it also has its sights set on Tanzania and Angola as the next areas of growth.

But analysts said FNB has quite a way to go before it can rival Standard Bank's 17-country footprint across Africa, including Nigeria.

FNB Africa chief executive Jabu Khethe said that the group had already invested about $6,5million (about R72million) of a $22,5million investment in setting up operations in Zambia and that the country offered an investor-friendly environment and low political risk.

"FNB made the decision to enter Zambia as it has one of the highest GDPs (Gross Domestic Products) in the region and the economy is growing at a favourable rate," said Khethe.

"The early part of our plan is to build a credible SADC (Southern African Development Community) franchise."

He said it was part of FNB's long-term plan to have a diversified revenue stream.

The bank has operations in Namibia, Botswana, Mozambique, Lesotho and Swaziland.

Tanzania, Angola, Uganda and Ghana are also being considered for further expansion.

"The momentum has gathered a bit now . we have hastened the pace. We are in the preparatory stage in Tanzania and Angola," said Khethe.

Tracy Brodziak, financial sector analyst at Old Mutual Investment Group, said it was a step in the right direction but "I don't think it's going to be a wholesale change".

"They are signalling their intent, but Standard Bank is a bit further ahead in terms of this strategy," she said.

Neville Chester, a portfolio manager at Coronation Fund Managers, said: "The direction is positive in that they [FNB] are looking closer to home rather than venturing offshore where they have been unsuccessful in the past."

Richard Hudson, former chief executive of FNB Lesotho and temporary chief executive of FNB Mozambique, will head up the Zambia operation.