Ethos-led Consortium Invests In Leading Nigerian Bank
An Ethos Private Equity-led consortium has today announced a pioneering strategic investment into leading Nigerian Bank, Oceanic Bank International Plc. The consortium, comprising Ethos Private Equity and Old Mutual Investment Group South Africa, invested US$130 million in Oceanic’s recent public offering. Oceanic is a new generation bank having commenced operations in 1990 and was listed on the booming Nigerian Stock Exchange in 2004.
Oceanic’s current strategic shareholding is owned and managed by Dr (Mrs) Cecilia Ibru (the wife of the founding Chairman and patriarch of the Ibru family – Olorogun Michael C. O. Ibru).
Ethos Partner, Ngalaah Chuphi comments, “Since the close of Fund V, Ethos has been actively pursuing investment opportunities in Sub-Saharan Africa; this is our first foray into West Africa. This strategic stake represents a unique opportunity to participate in Africa’s fastest growing banking sector through an investment in one of Nigeria’s tier one banks. Oceanic is well placed to capture the benefits of a rapidly growing Nigerian economy with tremendous opportunities to grow its businesses by lending to the rapidly growing real economy.”
Mark Gevers, Head of Old Mutual Investment Group of South Africa’s Private Equity division, adds, "The Nigerian banking industry follows a sound regulatory framework and has recently undergone a successful first round of consolidation. The untapped potential for financial and banking services is particularly attractive. We are excited by this transaction, which enables OMIGSA to expand our African footprint in partnership with Ethos and Oceanic.”
According to the Central Bank of Nigeria (CBN), a significant percentage of cash in circulation in Nigeria is outside the banking system. Nigeria is at the moment mostly a cash economy. The CBN is encouraging banks to bring into the banking system all this liquidity through rolling out branches to collect deposits.
“Such deposits will then be available to finance lending activities and growth in the Nigerian economy” reflects Ethos Partner, Anthonie de Beer. He concludes, “The majority of Nigeria’s c. 140 million strong population has no access to regular banking products such as mortgages, car loans, credit cards, etc. Most transactions are cash based. Thus the opportunity for banks is immense.”