Citi, Blackstone reveal private banking interest in Nigeria


Citibank is seeking to expand its private banking business in Nigeria, with Private Equity (PE) firm, Blackstone being brought in to help facilitate the move, sources familiar with the matter told BusinessDay.

Blackstone which currently manages a fund for Citibank’s wealth management arm, made a presentation to 15 high networth individuals in Lagos Monday night.
“Citi brought them (Blackstone) in to discuss  prospects in the Nigerian market. They are still studying the marekt, right now they have made minimal investments in the continent specifically in Ghana, but they are looking at expanding into Nigeria, that is in the future,” a top ranking Citi official told BusinessDay.
Africa may have as much as 200 “hidden” billionaires operating in the unofficial economy, investor, Mark Mobius, said last year. Nigeria’s gross domestic product (GDP) is forecast to expand an average of 6 percent a year for the next five years, according to International Monetary Fund (IMF) data. This is seen as benefiting the rich, helping to guarantee a market for the likes of Citi, as they serve wealthy individuals seeking to actively manage their money.
The current value of  the Nigerian private banking market is estimated at over $60 billion and the country has the continent’s richest man, Aliko Dangote, having a total net worth of $13 billion, according to Forbes. In terms of numbers, about 460 of the over 160 million people account for the $60 billion.
The positive macro-economic backdrop is also making Nigeria attractive to PE firms such as Blackstone.
Local banks that have invested in the private banking business include United Bank for Africa (UBA) with its prestige banking and First Bank of Nigeria Plc (FirstBank) with its private banking division.
Nigeria joined the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) last year; the second African country to join after South Africa, which analysts say is likely to generate “substantial capital inflows.”
At the beginning of November,2012 rating firm, Standard and Poor’s (S&P) raised Nigeria’s rating by one notch to BB-, with a stable outlook. Nigeria’s dollar reserves increased 33.6 percent, to $44 billion by year end 2012, from $32.92 at the beginning of last year.
The naira which rose by 3.9 percent versus the dollar in 2012 was the strongest performer among currencies tracked on the continent, according to Bloomberg data.
Citi private banking is one of the leading providers of investing, banking, lending and wealth advice to the world’s most successful individuals and families, across 46 countries and jurisdictions, and has over $250 billion in assets under management.
The Private Bank offers a wide range of products and services covering capital markets, managed investments, portfolio management, trust and estate planning, investment finance, banking and art, aircraft and sports advisory, and finance.
Blackstone’s private equity funds which pursue investment opportunities in a variety of global markets have $51 billion in assets under management and have concluded 173 transactions since 1988.
At the end of 2012, 75 percent of investments were in North America, 17 percent in Europe, 6 percent in Asia, and 1 percent in the Middle East and Africa region.

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