The decline of Denel would compromise South Africa’s strategic independence, says chief restructuring officer (CRO) Riaz Saloojee, making the ... timely disbursal of the R3.4bn ($196m) lifeline thrown to the entity critical.
“In Africa, we have adopted a targeted strategy and continue to strengthen our position where the characteristics of the market correspond well to our strengths and the desired conditions in terms of development and risk control,” said BNP Paribas’ head office in France.
Officially, the leading French banking group in terms of assets, which achieved a net profit of more than €9.5bn ($10.5bn) in 2021 and still has seven establishments in Africa*, continues to see the continent as part of its “international set-up”. However, the facts and dynamics of divestitures that have been underway for three years say otherwise.
As revealed by Africa Business+ at the end of February, BNP Paribas has undertaken to sell its 54.11% owned subsidiary in Senegal, also known as the land of teranga (hospitality). As such, the French bank is about to sell its shares in its subsidiary Banque Internationale pour le Commerce et l’Industrie du Sénégal (Bicis) to a currently unidentified buyer.
The sixth largest bank in Senegal
According to our information, the bank decided to withdraw after the Republic of Senegalese announced that it would be reducing its shareholding. As a matter of fact, at the end of December 2020, the state held nearly 25% of Bicis’ capital compared to 42% during its partial privatisation in 1991.
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It is worth noting that the project to sell the Senegalese subsidiary, which was discussed at an exceptional executive committee meeting held at the end of February, is also part of the group’s refocusing strategy.
Bicis, the sixth-largest bank in Senegal in terms of total assets, recorded a net banking product (NBI) of €52m ($57.6m) last year, 3.5 times less than that of the group’s first African subsidiary (South Africa). Bicis remains the least successful of BNP’s two remaining West African subsidiaries, as the Banque Internationale pour le Commerce et l’Industrie de la Côte d’Ivoire (Bicici) achieved €70m ($77.5m) in NBI in 2021.
Refocusing in Europe and Asia
“There have been increasing signs in recent months that the group has been refocusing its activity,” one of the bank’s African executives, who wishes to remain anonymous, tells us. “This does not only concern Africa, as the group wants to focus on Europe and Asia,” he says, reiterating the guideline of the French bank’s 2020-2025 strategic plan.
In fact, at the end of December, BNP Paribas sold its US bank Bank of the West for more than $16bn and formally withdrew from the US retail banking market after more than 40 years of presence.
On the continent, BNP Paribas sold its Burkinabe (Biciab) and Guinean (Bicigui) subsidiaries to Simon Tiemtoré’s Vista Bank group last July. A year ago, the banking group sold its holdings in Gabon, Mali and the Comoros to its Ivorian partner Atlantic Financial Group, which is headed by Koné Dossongui.
In Tunisia, it took more than two years to finalise the sale of the majority control of its subsidiary Union Bancaire pour le Commerce et l’Industrie (UBCI), a process that had begun in 2019.
Special cases of Algeria, Morocco and Côte d’Ivoire
Today, and for retail banking (the establishments in Southern Africa are dedicated to ‘personal finance’ activity), BNP’s forces are therefore only concentrated in North Africa and in West Africa for Senegal and Côte d’Ivoire.
Since the Senegal sale will be finalised soon, only Côte d’Ivoire will remain. While internal sources maintain that only Bicis is currently being discussed, the Parisian holding company is neither confirming nor denying the rumour of a departure from Côte d’Ivoire.
Even though Côte d’Ivoire and Senegal are part of BNP’s Europe-Mediterranean region [as are Morocco and Algeria], the bank is closer to the North African establishments…
Ranked among the top five banks in the country, BNP’s Ivorian subsidiary achieved a GNP of €70m ($77.5m) in 2021, after managing to maintain it at nearly €68m ($75m) in 2020, at the height of the health crisis.
However, this strategy goes beyond simple results. “Even though Côte d’Ivoire and Senegal are part of BNP’s Europe-Mediterranean region [as are Morocco and Algeria], the bank is closer to the North African establishments, and the investments made in these subsidiaries, particularly in the field of IT, prove it,” says an executive.
In fact, in 2021, Morocco weighed most heavily in the balance after recording a GNP of €278m ($308m), i.e. a result four times higher than that of the first subsidiary in West Africa.
BNP Paribas’ strategic plan expires in 2025, so there is still time to look ahead.
* As of 31 December 2021, BNP Paribas was present in South Africa, Algeria, Côte d’Ivoire, Namibia, as well as Morocco, Senegal and Botswana.
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