Absa Group is considering returning to Angola and exploring a merchant banking licence in Nigeria as the South African lender seeks to diversify its earnings beyond its main markets. The expansion would deepen Absa's corporate and investment banking presence in two of Africa's largest economies.
Absa Group is considering a return to Angola and evaluating whether to seek a merchant banking licence in Nigeria as the South African lender looks to expand its presence across Africa.
The bank plans to establish a representative office in Angola, nearly two decades after leaving the market, according to Business Day. The move is intended to support Absa's corporate and investment banking activities and identify trade and global market opportunities in the country.
Absa already operates a representative office in Nigeria but is assessing whether to maintain that structure or pursue a merchant banking licence. Such a licence would allow the group to participate more extensively in areas including capital markets, underwriting and advisory services.
Absa Group CEO Kenny Fihla said the expansion forms part of efforts to reduce the group's concentration in its three main markets of South Africa, Ghana and Kenya.
South Africa accounted for 72% of Absa Group's earnings in the six months to the end of June, according to Business Day. Fihla said the performance highlighted the need to diversify the group's income and geographic exposure.
For Nigeria, Fihla said Absa was assessing whether to remain with its existing representative-office model or take a further step by applying for a merchant banking licence. He said the review was underway and that the group would communicate its decision at the appropriate time.
The potential Nigerian expansion would give Absa a larger role in Africa's biggest economy and one of the continent's major financial and commodity markets. The bank's existing Nigerian operation already focuses on corporate and investment banking services.
The proposed moves come as Absa seeks to broaden its African earnings base while reducing reliance on its largest market. The group has also been expanding its corporate and investment banking capabilities across the continent.
Importantly, neither move represents a completed banking expansion yet. The Angola plan concerns a proposed representative office, while the Nigerian merchant banking licence remains under evaluation.
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