The recent return of Bank Windhoek shares to ABSA, through Barclays Bank has killed hopes of Namibia ever having a financial institution that is wholly locally owned.
Barclays Bank, ABSA South Africa’s mother company, has acquired 49.9% shares in Bank Windhoek, arguably one of the highest foreign direct investments (FDIs) into Namibia this year, thereby becoming the single majority shareholder.
Bank Windhoek, the only wholly Namibian owned financial institution until last week when the deal was struck, became the flagship of Capricorn Investment Holdings (CIH) in 2006 after ABSA had relinquished its 34.4% shares.
But six years down the line, CIH has given back not only 34.4% shares but an additional 15.5% as well as majority local ownership.
Ironically, ABSA, a low to medium earners’ bank, had previously bid for the shares but Bank of Namibia (BoN) turned it down saying this would make all the major banks in the country South African.
When the deal, estimated to be about N$1.3b, was announced, deputy governor of BoN, Ebson Uanguta, said one of the conditions of the merger was to maintain considerable stake in Bank Windhoek so that locals do not lose grip on their own banking sector.
“Unlike the previous proposal by ABSA, the approved application is favourable as it ensures that the majority indirect ownership in Bank Windhoek Limited, (51.1%), will remain in the hands of Namibian nationals.
“At the same time, this transaction will afford Barclays Group - a major banking group from the United Kingdom - indirect shareholding in Bank Windhoek Limited. This will reduce the single country exposure, given the existing Namibian Banking sector,” said Uanguta.
Apart from Barclays Bank as the majority shareholder, the employee share trusts has 7%, Nam-mic Financial Services Holdings 10.5%, Namibia Strategic Investment 7. 8% and others 2. 1%.
While Uanguta seems convinced that BoN has successfully avoided single country exposure in the banking sector, Barclays owns majority shares in ABSA which means there is an indirect South African link.
Other than Bank Windhoek being the latest bank to give a considerable stake to foreign ownership, all the other three commercial banks; First National Bank (FNB) Namibia, Standard Bank Namibian (SBN) and Nedbank are umbilically linked to South African banks.
The billion-dollar acquisition of Bank Windhoek by the multinational entity, which also has operations in Zambia, Zimbabwe and Botswana also means that the Government of Namibia needs to do more to create market space for locals to penetrate the financial services sector.
In a recent interview with The Villager, both the Minister of Finance, Saara Kuugongelwa-Amadhila and Prime Minister Nahas Angula expressed dismay over foreign domination of the financial services sector saying, “Namibia has not really transformed its financial sector enough for it to create ownership opportunities for the locals nor has it managed to give access to the low to medium earning locals because of unreasonably high banking charges.”
Government has been particularly concerned with the more than 50% of the population that is out of the banking sector, because they either can afford banking facilities or just do not have enough money to plant into the financial sector because of low earnings.