EFG-Hermes Eyes Nigeria’s Banking Licence

The EFG-Hermes Holding S.A.E, one of the leading financial services corporations in frontier and emerging markets (FEM) that specialises in securities brokerage, asset management, investment banking, private equity and research, will apply for an investment-banking licence in Nigeria in its move to expand in West Africa after acquiring brokerage and research firm, Primera Africa Securities Limited.

The company that is based in Egypt, wants to use Nigeria as a regional hub to support clients in countries including Ghana and Ivory Coast.

Bloomberg quoted the Chief Executive Officer of EFG-Hermes’ frontier unit, Ali Khalpey, to have said this in interview in Lagos.

“The Nigerian licence marks the next phase of growth for the firm seeking to grow in undeveloped markets across Africa and Asia,” he said.

EFG-Hermes bought Primera Africa in July, its second foray into sub-Saharan Africa after obtaining a Kenyan stockbroking licence in July 2017 that enables it to extend its operations to Tanzania, Uganda and Rwanda. The company’s investment-banking advisory business is targeting multinationals and big local companies as customers, according to Khalpey.

It hopes to conclude the acquisition of Primera in the next four weeks, subject to regulatory approvals and the Lagos-based brokerage firm fulfilling some conditions, he said.

EFG-Hermes, the top adviser on initial public offerings in the Middle East and North Africa last year, hired Khalpey in January 2017 to build a frontier-markets business. Since then it has opened in Bangladesh, acquired a brokerage in Pakistan and is starting to serve clients in Vietnam.

The company is looking to make hires in Nigeria in the fields of research, trading and investment banking as it aims to establish a strong platform to manage growing volumes of business from the region, according to the CEO.

“We are very excited about where Nigeria will go,” Khalpey said. “There will be speed bumps along the way but it is a very exciting capital market for us.”

“While investor sentiment toward Nigeria and other emerging and frontier markets has soured in the face of higher US interest rates and uncertainty over a global trade war, many assets remain attractive and the mood could change,” he said.

The stock market, down more than 15 per cent this year, could rebound after elections planned for the first quarter, he said, adding that yields on Nigerian Treasury bills also need to come down to spur more investors into equities.

“Nigeria may have some investor apathy today,” Khalpey said. “But we are building a business on a 15-year view.”