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Mozambique: From Austral to Barclays
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Agencia de Informacao de Mocambique (Maputo)
3 December 2007
Posted to the web 3 December 2007
Maputo
The scandal-tainted name of the Austral Bank has passed into history: as from Monday, the bank bears the name of Barclays-Mozambique.
The change in name follows the 2005 takeover by Barclays of the South African group ABSA. Barclays paid the equivalent of 2.6 billion dollars for a 56 per cent stake in ABSA. Since ABSA owned 80 per cent of Austral, Barclays found itself in control of the Mozambican bank.
At a Maputo press conference marking the change of name, the Chief Executive Officer of Barclays Mozambique, Paul Nice, declared "The bank is a truly global business, with international standards of governance and control. This provides comfort and peace of mind to our customers".
Barclays' target, he said, was "to be the best retail and commercial bank for every customer, every market, every product, every time. It is this that has made Barclays such a strong brand in all the countries where we are present".
He said that, before any changes were made, Austral carried out a survey of its customers, "who made it clear they wanted a change in corporate identity to a global bank".
In terms of number of branches, Austral/Barclays has the second largest network in Mozambique. In 2006, it had 48 branches and 71 automatic teller machines (ATMs). This was a long way behind the largest of the commercial banks, the Millennium-BIM (International Bank of Mozambique), which had 76 branches and 191 ATMs.
Nice declared that Barclays is expanding. By the end of this year it would be opening ten new branches - however, the ones he mentioned were all in Maputo city and province, including at three shopping centres in the Maputo-Matola connurbation.
Asked if this did not simply consolidate the imbalance whereby most bank branches are in Maputo and Matola, while vast swathes of rural Mozambique have no banking facilities at all, Nice said Barclays "is looking into where we can open branches across Mozambique, and we are engaging with the central bank and other stakeholders to help us do that".
In 2008, he added, Barclays hoped "to roll out 30 new points of presence. We are committed to expansion". But he added that new branches "must be commercially viable".
As for staffing levels, Nice said that at the start of 2007 Austral had 700 employees, and by the end of the year Barclays will have almost 800. For the staff, the advantage of working for a global brand is that could be transferred to other countries, particularly if they spoke English. Barclays has branches in around 70 countries.
Asked about the constant complaints from Mozambican businesses about the high interest rates charged by the commercial banks, Nice claimed "the cost of money is very much set by the economy and the central bank".
"The market prices itself and is getting more and more competitive", he added.
Barclays would pay particular attention to its business clients, he pledged, and in 2008 new corporate banking offices would open "with up to five senior corporate bankers, and ten support staff".
With this new facility "banking in Mozambique will be much more visible in the corporate sector", Nice said. "Other banks need to come to the party".
The bank has a troubled history. It started life, shortly after Mozambican independence, as the state-owned People's Development Bank (BPD). This bank did make a serious attempt to provide savings facilities for farmers, but much of its rural network was destroyed by the apartheid-backed Renamo rebels during the war of destabilisation.
After the end of the war, the Mozambican government came under heavy pressure from the IMF and the World Bank to pull the state out of commercial banking. So the two state-owned banks were privatised: 60 per cent of the BPD was sold to a Malaysian/Mozambican consortium in 1997, and the bank was renamed Austral.
The following three years saw a wave of reckless lending that brought the bank to its knees. When the consortium could not provide extra capital to cover the non-performing loans, they simply handed their shares back to the state.
The Central Bank had to step in, appoint an interim board of governors, and try to keep the bank afloat, while attempts were made to find new buyers.
According to Prime Minister Luisa Diogo, interviewed in the latest issue of the Sunday paper "Domingo", the World Bank told the Mozambican government to liquidate Austral, and even threatened that there would be no further loans to Mozambique unless the government followed this instruction.
Diogo (who was then Finance Minister) invited a high level World Bank delegation to Maputo, and they changed their minds about Austral after talking to the man the central bank had put at the head of the new board, Antonio Siba-Siba Macuacua.
The bank was saved, and in December 2001 80 per cent of the shares were sold to ABSA. But by then Siba-Siba was dead, murdered at his office by unknown assailants on 11 August 2001.
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Six years later, despite a forensic audit of Austral, nobody has been charged with fraud or malfeasance over the collapse of the bank, and nor has anyone been arrested in connection with the murder of Siba-Siba.
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| Copyright © 2007 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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