Going global, with expertise

The business unit has propelled the banking giant into a regional powerhouse

There’s no doubt that the separation from Barclays will affect Absa’s Corporate & Investment Banking (CIB) business, but plans are well advanced to plug any gaps that may develop.

These plans include the opening of CIB offices in London, New York and Asia, and hiring the kind of sector expertise previously provided by Barclays.

Joint CEO of CIB, Mike Harvey, expects the loss of Barclays’ expertise to be felt most in CIB’S markets business, which involves trading in equities, derivatives, fixed income investments and currencies. This is a business that benefited from Barclays’ product development and international distribution. But, at most, CIB’S market business is likely to suffer a 10% drop in revenue, says Harvey.

CIB SA grew headline earnings 16% in 2017 to R3,3bn, and contributed 14% to group profit. If the rest of Africa is included, the contribution to group earnings rises to 28%. The seeding of investment banking skills and know-how from London, backed by Barclays’ financial strength and international network, turned CIB into a regional powerhouse.

The CIB business is split between Harvey and fellow CEO Temi Ofong. Harvey looks after global markets, corporate finance, property finance and financing activities — while Ofong looks after lending, short-term finance and transactional banking for the corporate market.

“We are being approached regularly by other banks and financial services providers looking to partner with us now that Barclays is moving out of the picture. So new opportunities are presenting themselves.”