After years of isolation resulting from economic sanctions, South Africa's banks have been quick to seize the opportunity to expand abroad. Earlier this year, Investec surprised international bankers by making two strategic acquisitions in London. In April it bought asset manager Guinness Mahon, then a month later Hambros.
But other banks have been expanding into markets closer to home. "We are looking at African countries which have a trade relationship with South Africa and which are more stable politically," says Nallie Bosman, group managing director at Absa. "Our strategy is to buy into an existing bank where the culture matches ours. We do not believe in a greenfield operation." In June Absa bought a 26% stake in Commercial Bank of Zimbabwe for R50 million ($8 million). According to Bosman, this deal is part of the bank's strategy to enter sub-Saharan Africa. BOE also believes it can export its banking expertise. "We want 30% of our income to come from international operations in the future," says the bank's group managing director, Phil Biden, but is reluctant to give details of which countries the bank is targeting.