Chasing Africa's millionaires.

Author:Nevin, Tom
Position::Finance - Interview - Interview
 
FREE EXCERPT

As the number of individuals in Africa with high net incomes (the odd million or two) increases, so does the proliferation of 'private banks' to service their special needs. The Absa banking group is leading the South African charge. TOM NEVIN talks to Wilf Robinson, managing executive at Absa.

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African Business: Absa is putting down roots all over Africa. How big is the opportunity?

Wilf Robinson: Sub-Saharan Africa is again beginning to attract the attention of the rest of the world. Current wealth in Middle Eastern and Asian countries is sufficiently exposed to its own geographical region and investors there are looking for new geographical outlets. They see Africa as an exciting growth area.

Money is arriving from the East and the Middle East, as are funds from South Africa, at the moment the biggest investor in Africa. Capital flows from Europe and North America are also chasing the continent's resources. Uganda, Tanzania, Mozambique, Botswana and Angola--these are countries where huge economic activity is taking place.

AB: A major focus in your African new-business drive is on private banking. Is Africa becoming a worthwhile new hunting ground for ultra high net worth clients?

Wilf Robinson: This economic resurgence means opportunity. As an example, many of our clients in South Africa are buying land in Zimbabwe because it's cheap at the moment and if it goes up in value, it'll go up big time, and will create wealth.

That's happening all over sub-Saharan Africa and we're seeing many more high net wealth clients being created in an emerging middle class. It's said there are more dollar millionaires in Nigeria than in all of Africa. If that's true, then there's a market there we haven't really begun to understand. There is huge potential.

AB: How big is the potential?

Wilf Robinson: Speaking for South Africa, we operate on a supposition of some 25,000 families with a net worth of over R10m ($1.5m) Estimates vary from 20,000 to 75,000. It's difficult to tell.

AB: Where else does Absa operate a private banking service?

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Wilf Robinson: We don't yet have a private bank on the ground north of the Limpopo, but we're looking hard at the numbers and the first one could be in place in less than six months.

We're busy with a study that will tell us where our private banking services should be represented. It's a desktop study right now, and that'll identify where we should be, where the potential is, and what staff and infrastructure...

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