Saturday, November 13, 2010

South Africa's Royal Bafokeng may buy R10 bln stake in bank

South Africa's Royal Bafokeng Holdings, a black-owned investment group, may take a stake of up to $1.5 billion in one of the country's big banks over the next few years, its chief executive said on Wednesday.

“We would like to have a significant investment in financial services and it's possibly a 5 to 10 billion ($750 million-$1.5 billion) stake in one of the big five financial services groups,” Niall Carroll told Reuters in an interview at RBH's offices in suburban Johannesburg.

As head of RBH, Carroll, a former investment banker, manages the commercial assets of the Royal Bafokeng Nation, a community of 300 000 black South Africans that owns 1200 square kilometres in one of the world's biggest platinum deposits.

Carroll is looking to diversify some of the community's assets away from mining and into financial services.

A deal with one of South Africa's top five banks -- Standard Bank, FirstRand, Absa, Nedbank or Investec -- would help do that, he said.

Acquiring the stake would be a “medium-term objective,” Carroll said, adding it could build up its holding over time. He gave no more precise time frame.

“Maybe we could do some now, maybe we could do some later, and that typically has been the strategy that we've followed.”

He is hoping South African lenders increase their minimum requirements for black ownership, which is currently around 10 percent, compared with about 26 percent in the mining industry.

Under a programme to increase black ownership of the economy after the end of white minority rule in the early 1990s, South African companies must meet quotas on black shareholders to win lucrative government contracts.

RBH this week listed one of its units, Royal Bafokeng Platinum, on the Johannesburg Stock Exchange following a $440 million initial public offering.