The Past Speaks

Bob Diamond, the former CEO of British bank Barclays, is launching a new company that will provide financial services in Africa. Diamond was forced to resigned from Barclays in July 2012 after it was fined a  £290m for its role in rigging key Libor interest rates. (The fines were levied by regulators on both sides of the Atlantic).

For a while, Bob Diamond kept a low profile but he is now back and ready to expand into Africa. Africa is an attractive region for a banker for any number of reasons. Many economies there are booming. Less than 1% of Africa’s billion inhabitants have bank accounts, but this figure will surely rise as the region becomes more affluent. Financial regulation in some African countries is essentially non-existent, whereas regulation of banks in Western countries is becoming increasingly onerous.

Rather than create a bank from scratch, Diamond plans to buy an existing financial services business in Africa, “with all or a substantial portion of its operations” in the continent. You can read more here.

You can read the prospectus for the venture here. However, before you click, I should point out the version of the prospectus on the London Stock Exchange website says that “NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.”

Anyway, according to the prospectus,  the Company’s geographical focus will be on  jurisdictions with (i) strong underlying fundamentals and clear broad-based growth drivers, (ii) a meaningful population and an identifiable market, (iii) established financial services regulatory systems, (iv) stable political structures and (v) strong or improving governance and anti-corruption ratings.

Mr. Diamond’s African business partner is Ashish J. Thakkar, who is one of the richest men in Africa and who has an amazing personal back-story. According to the prospectus, Mr. Thakkar started his first IT company in 1996 at the age of 15 in Uganda. He has successfully driven the growth of Mara Group to become a globally recognised multi-sector conglomerate with investments in IT services, manufacturing, agriculture and real estate operations in 21 countries (of which 19 are African) that employ over 8,000 people.

Interestingly, Barclays, Mr. Diamond’s former employer, has long had a presence in Africa.  Readers interested in the bank’s history in Africa may be interested in the following article by Stephanie Decker of Aston Business School.

Decker, Stephanie. “Decolonising Barclays Bank DCO? Corporate Africanisation in Nigeria, 1945-69,” Journal of Imperial and Commonwealth History 33  (2005): 419-440.