AfrAsia Bank targets IPO late-2016: National Bank of Canada ups stake in bank to 17.5%
Mauritius-headquartered AfrAsia bank’s Tier 1 Capital now stands at Rs 4.2billion with a Capital Adequacy Ratio above 13.5%, and a prominent shareholder, the Montreal-based National Bank of Canada,has recently increased its stake in the bank by 8% to 17.5%.
The National Bank of Canada (NBC) has acquired an additional 8% shareholding in AfrAsia Bank, bringing its total equity stake to 17.5%, which further strengthens the bank’s capital base, positions it for future growth and supports its strategic expansion, with the Mauritian financial services major now targeting an IPO in the second half of 2016.
This additional investment further reinforces the long-term partnership intended to create value for both AfrAsia Bank and the NBC, while also positioning NBC as AfrAsia’s second largest shareholder.
This increase in stake by the NBC was implemented following a rights issue launched and completed by AfrAsia Bank, which saw the bank raise additional capital of Rs 920million. This has further strengthened the bank’s capital base, positioning it for future growth and supporting its strategic expansion.
The Tier 1 Capital of the bank now stands at Rs 4.2billion, with a Capital Adequacy Ratio above 13.5%.
“This new investment evidences the trust of NBC in AfrAsia Bank’s ambitions and international expansion plans as we continue to build bridges between Africa and the world. Over the past eight years, we have been focusing on regional and international growth, while reinforcing our footprint through our representative offices in Johannesburg, Cape Town and London,”said Maurice Lam, Chairman of AfrAsia Bank.
“This strategic deal with NBC creates long-term value for our shareholders and underpins the financial strength of the bank while we continue to pursue attractive growth opportunities,” added the Chairman.
Meanwhile, AfrAsia CEO James Benoit noted that the successful completion of the capital increase marks a decisive step in the continued expansion of AfrAsia Bank in the region and internationally, as it paves the way to exploit opportunities while further boosting profitability.
With economic growth in sub-Saharan Africa rising to 4.5% in 2014, Montreal-based NBC said that the expansion into Africa is consistent with its strategy of boosting its international presence.
“Africa’s fast-growing and emerging economies offer unique business opportunities and AfrAsia Bank is well-positioned to benefit from this,” explained Louis Vachon, President and Chief Executive Officer of National Bank of Canada.
“We are proud of the partnership we forged in 2014, and by increasing our stake, we will be able to support AfrAsia Bank’s growth even more,” he added.
“AfrAsia Bank shares the National Bank’s strong commitment to excellence and client satisfaction,”noted Karen Leggett, Chief Marketing Officer and Executive Vice-President, Corporate Development, NBC.
“We are also very familiar with the reality of organisations that have a diversified business model and a strong regional concentration. Our expertise and business networks will allow us to contribute to AfrAsia’s commercial and strategic development,” she concluded.
AfrAsia Bank has just closed its financial year on 30 June 2015, with total assets of Rs 73billion compared to Rs 47billion last year. Deposits have increased by 60% from Rs 41billion to Rs 66billion, while Total Operating Income has exceeded Rs 1.5billion, compared to Rs 1.2billion for the previous financial year.
Following this latest capital raising and rights issue, AfrAsia Bank’s major shareholders now stand as follows: GML Investissement Ltée (24.10%), National Bank of Canada (17.5%), Intrasia Capital Pte Ltd (10.44%) and PROPARCO (9.03%). The bank is now targeting an IPO in the second half of 2016.