It is what it is: the African market is exceedingly heterogeneous and unconstrained in its amorphous nature, making it challenging to create a working playbook. Because anything you model can be upended by one policy shift, your management is always in a crisis mode. If you have run a bank in London, do not think it qualifies you to run a good one in Africa. In short, having a London experience may even be disqualifying as you had been conditioned in a market full of probabilistic order!
So, the news today is that Atlas Mara, founded by former Barclays CEO, Bob Diamond, is just about done. That was the company many heralded would disrupt African banking when it raised tons of money in London, buying badly managed banks, with the hope to turn dying cats into roaring leopards. The man at the helm is legendary: he ran Barclays in London, and was a zen-master in the game of banking.
Atlas Mara Ltd., the African banking group started by former Barclays Plc Chief Executive Officer Bob Diamond, agreed to sell its Rwandan and Tanzanian operations as the lender started talks with debt holders about upcoming repayments. Kenya’s biggest bank KCB Group Plc will buy a 62.06% stake in the Rwanda business and Atlas Mara’s Tanzanian unit to further expand its operations in the East African region, the Nairobi-based company said. It agreed to pay 1.09 times book value for Banque Populaire du Rwanda Plc and 0.42 times for African Banking Corp. Tanzania Ltd., it said in a statement Thursday.
The deal is part of London-listed Atlas Mara’s strategy of paring back on its African foray after Diamond, 69, misjudged competition on the continent and paid too much for acquisitions. The onset of the coronavirus pandemic has accelerated the need to reposition the company, which has seen about 96% plunge in its stock since it started trading toward the end of 2013.
Unfortunately, after many trials, Atlas Mara is shrinking in Africa. It did not work: they will leave Tanzania and Rwanda. They have succeeded in one thing – massive destruction of value, as the stock has lost more than 95% of its IPO number. The problem was not Africa. Blame those at the leadership of Atlas Mara.
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This is the fact: African banking runs faster than even American banking when it comes to retail innovation. There are many things you can do today in Lagos, no bank will offer you in New York. New York retail banking has attained a stable state while banking in Africa remains in a dynamic state. If you are conditioned to order, forget it. Yes, the locals will innovate and out-compete you.
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Ogene Abia State… BCA Radio, Umuahia!!!
Maybe they did not explain the thing well to the man Bob, so it happened…
It is what it is: don’t explain, and never complain.
Thank you, thank you! The entire mis-episode has been summarised thus…
“In short, having a London experience may even be disqualifying as you had been conditioned in a market full of probabilistic order!”
Bob Dee committed three fatal erorrs
1/ Execution. He and his team sat down in Dubai earning fat bonuses! But did they ever rollup their sleeves and get down to basics!? Nope.
2/ People. Bob D surrounded himself with people who had no idea how Africa runs. Investment bankers for retail banking jobs. Citibankers who were used to following manuals and procedures but could not innovate from ground zero
3/ Strategy. The biggest gap of them all. Atlas Mara wanted to dominate Africa and, rather than focus on Retail Banking franchises in the biggest countries, they simply went into the wrong Markets, with the wrong Leadership, with the wrong Products, with the wrong Plans.
The article summarised it perfectly: “The problem was not Africa. Blame those at the leadership of Atlas Mara. This is the fact: African banking runs faster than even American banking when it comes to retail innovation. There are many things you can do today in Lagos, no bank will offer you in New York. New York retail banking has attained a stable state while banking in Africa remains in a dynamic state. If you are conditioned to order, forget it. Yes, the locals will innovate and out-compete you.”
They scored many own-goals and paid for the mistakes. Except Union Bank Nigeria, Atlas Mara has not scored any forward goal.