Emerging Capital Partners has acquired a controlling interest in BACIM Bank, the seventh-largest banking group in Mauritania. The deal is valued at $15.9 million.
Emerging Capital Partners (ECP), an international private equity firm focused on investing across the African continent, today announced a U.S. $15.9 million investment to acquire a controlling interest in BACIM Bank, the seventh largest banking group in Mauritania. ECP's investment will enable BACIM to transform into a top-tier banking institution by strengthening management, consolidating resources, and upgrading technology infrastructure and improving risk management.
“The Mauritanian banking sector is poised for significant growth over the next five years due to solid macroeconomic fundamentals, an emerging consumer market, and a growing corporate sector,” said Vincent Le Guennou, executive vice president of ECP. “We expect that the growing Mauritanian economy and the increasing confidence of the international community will continue to stimulate foreign direct investment in the country, resulting in substantial gains for the banking sector.”
Mauritania's financial system includes 11 retail and commercial banks, most of which began as joint ventures between the state and foreign or domestic investors, and were progressively privatized. As of December 2006, the 11 banks had aggregate assets of $1.0 billion and managed approximately 125,000 bank accounts, making Mauritania's banking penetration rate a mere 4.2 percent. This is one of the lowest across all of Africa and particularly in the surrounding Maghreb countries, where banking rates are around 50 percent. However, bank deposits have recently registered an annual growth rate of 11 percent, and the arrival of new international players reflects the greater attractiveness of the sector.
“We believe that ECP's capital and world-class business practices will enable BACIM to record significant gains over the next few years,” said Khalil Chyat, director of ECP. “Our plans for the company include improving overall management, infrastructure, training and risk policies, as well as expanding the business into new market segments and setting up a program to better recover non-performing loans. With these improvements in place, we expect that BACIM will be able to better compete both within Mauritania and throughout the region.”
BACIM was founded in 2002 and is headquartered in the capital city of Nouakchott. Its services include a full range of conventional and Islamic banking products, as well as retail, treasury and corporate banking. In addition, BACIM's Islamic products – such as Mourabaha or housing savings products – are quite innovative for Mauritania.
The investment in BACIM was made through the $150 million ECP MENA Growth Fund, which was established in 2007 to target various sectors throughout the Middle East and North Africa such as food processing, consumer-related retail and distribution, telecommunications, media, energy, manufacturing, transportation, healthcare, petrochemicals, logistics, financial services and tourism.
ECP currently holds stakes in five African financial services companies, including 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; and Intercontinental Bank Plc, the second largest banking group in Nigeria. Last year, the firm successfully exited its position in Ecobank Transnational Incorporated, one of the largest regional banking groups in sub-Saharan Africa, for a return of 3x the initial investment.
Emerging Capital Partners (ECP) is the first private equity firm to raise more than $1.2 billion to invest in companies across the African continent. The ECP team has an eight-year track record of pan-African investing through six successful funds. 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.