Windhoek — Namibia's central bank would consider a reconfigured bid by South Africa's Absa Bank to take up rather a minority equity in Namibia's second largest commercial bank, Bank Windhoek, The Southern Times has established.

Namibian authorities in July blocked Absa, which already runs a representative office in Namibia, from buying a majority stake in Capricorn Investment Holdings (CIH), the holding company for Bank Windhoek, citing fears about increased foreign dominance in the financial sector.

The Bank of Namibia (BoN) threw out the Absa bid, arguing Namibia's banking sector should reflect Namibian ownership. Absa, which is majority owned by Britain's Barclays Bank, had bid for at least 70 percent of CIH.

The BoN is concerned that should the transaction be approved, all domestic banks will be majority foreign owned, which is not in line with national development objectives. This could further expose the Namibian banking industry to a single country risk, a situation that it not desirable, BoN Governor Ipumbu Shiimi said in July.

But it appears BoN has now back-pedalled from its previously hard-line stance, saying Absa, South Africa's largest retail bank by assets, could take up equity in the Namibian bank if it is willing to come in as a minority shareholder.

Shiimi told The Southern Times that Absa and the central bank are holding "informal talks".

Shiimi, who took over the central bank's reins early this year, said Namibian authorities objected to Absa's bid for majority control "and not Absa's presence in Namibia".

"What was rejected in the application is the configuration. Absa is welcome as long as they do not take a majority shareholding, we are talking of anything which is not above 51 percent,' Shiimi said.

Absa has said its strategy is to establish a presence in rowing African markets in a major push as it battles to stave off competition at home and set up an African footprint.

Its rivals in the South African market - Nedbank, FNB Bank and Standard Bank - have an established presence in the Namibian market.

Standard Bank also, for instance, has operations in 17 African countries.

Capricorn is a financial-services group whose business portfolio includes the flagship brand Bank Windhoek, now the country's second largest bank. Namibian-owned Capricorn has operations in Botswana and Zambia.

Capricorn holds an effective 88 percent in Bank Gaborone and a deal with Absa could land the South African bank unassailable entry into the Botswana market.

"They are (Absa) talking to us, informally though, and we have indicated to them that we are still willing to talk. They are welcome to make a proposal but nothing has been formally launched with us," Shiimi said.

Apart from Namibian and Botswana operations, Capricorn also owns a 44.2 percent stake in Caymont Bank Ltd., a medium-sized commercial bank in Zambia.

"If the (CIH) shareholders want to sell, we obviously encourage them to sell but the majority shareholding should remain Namibian.

"We need increased local ownership in the banking sector and there is already consensus in Namibia that local ownership is important," Shiimi said. - The Southern Times