The Bank of Namibia (BoN), the country’s central bank, last week rejected South Africa-based Absa Group’s application to acquire a majority stake in Bank Windhoek.
According to the BoN, the acquisition would not support its plan to increase local participation in the financial system as a whole.
Absa and Capricorn Investment Holdings (CIH) had reached a non-binding agreement in February this year to allow Absa to pursue an acquisition of a majority stake in CIH. Bank Windhoek Ltd is a wholly owned subsidiary of Bank Windhoek Holdings Ltd, in which CIH holds a 72.9% interest.
A press release issued by CIH stated that “although BoN believes that ‘the shareholders of CIH are people of good repute, who have made a significant contribution to the development of Namibia‘ and ‘considers the Absa Group as a credible and leading financial institution that has a good track record regionally and internationally’ the BoN expressed their concern that ‘should the transaction be approved, all domestic banks will be majority foreign owned, which is not in line with the national development objectives, as articulated in Vision 2030 and NDP3’.
The BoN’s decision is seen as a setback for Absa. Like many other South African lenders, Absa is keen to push into fast-growing markets across the continent due to stiff competition and a more mature market in South Africa.
Additional reporting by Imara Africa Securities