Emerging Capital Partners has acquired a minority stake in Financial BC SA, a regional commercial bank based in the African nation of Togo, in exchange for $28 million.
Emerging Capital Partners (ECP), an international private equity firm focused on investing across the African continent, announced today that it has purchased a minority stake in Financial BC SA (FBC), a privately held Lome, Togo-based regional commercial bank. ECP’s initial US $28 million (euro 17.8 million) investment – made in the form of common shares and convertible notes – will help the bank expand its presence throughout central and western Africa and will assist FBC in making changes to its corporate structure.
FBC primarily engages in consumer and institutional banking in Benin, Togo, Gabon, Chad and Guinea. It has also started expansion into the microfinance sector by providing small loans to low-income populations through its three Finadev affiliates. FBC plans to continue broadening its customer base by tapping into the large corporate lending sector as well as offering non-lending related products and services such as ATMs, remittances and money transfers.
“ECP is continuing to see strong growth and substantial banking reform across Africa, which makes regional players like FBC attractive targets for investment,” said Tom Gibian, chief executive officer of ECP. “We believe FBC is well positioned in francophone Africa to capitalize on these trends through its strong leadership and commitment to high quality customer service.”
Currently, financial penetration rates in central and western Africa are estimated to be only about 8 percent, which defines a large opportunity for banks like FBC as the real gross domestic product continues to grow between 3 and 6 percent a year. Banking reforms and increased economic integration across the region have also presented a significant opportunity for growth.
FBC was founded in 1988 by current chairman Remy Baysset. The bank currently employs more than 440 employees, operates approximately 20 branches, serves more than 11,000 clients, and has a total asset base of over US $350 million (euro 1.45 million).
“ECP has long seen the tremendous potential in African financial services and believes that FBC can further tap into a large reserve of underserved markets,” said Vincent le Guennou, executive vice president of ECP. “We are looking forward to working with the bank to increase the efficiency of its organizational structure and to further enhance its implementation of international best practices.”
The investment in FCB is ECP’s eighth in the African financial services sector. The firm continues to hold stakes in six other financial services companies: Blue Financial Services, a non-deposit taking micro lender serving 10 countries in sub-Saharan Africa; BACIM Bank, the seventh largest banking group in Mauritania; Continental Reinsurance plc, Nigeria’s largest reinsurance company; African Financial Holdings, a prominent banking group with eight subsidiaries across Africa operating under the Bank of Africa brand name; Intercontinental Bank plc, one of the largest banking groups in Nigeria; and Generale Assurance Mediterraneenne, a life and non-life insurance company in Algeria.
Emerging Capital Partners (ECP) is the first private equity firm to raise more than $1.5 billion to invest in companies across the African continent. The ECP team has an eight-year track record of pan-African investing. The firm’s investment strategy is focused on delivering consistently above-market returns to investors that are uncorrelated to the U.S. and other global economies. For more information, please see www.ecpinvestments.com.