Without optimism, there is no profitability in Africa. This has been the strategic stance of two of the top global banks, Citigroup and JPMorgan Chase, that have decades of experience in the most advanced African economy – South Africa.
JPMorgan Chase & Co. and Citigroup Inc. are the only American banks with a registered office in South Africa, Africa's most advanced financial market; making them by far the most optimistic American banks in Africa. Their presence alone tells a story of future possibilities, and current unseen opportunities that they clearly are reaping the benefits thereof.
Whilst many banks globally have local representative and regional offices, these two are literally international banks that established a formal local presence so that, in JPMorgan's words, they have customers maximised "Local Expertise, Global Resources".
J.P. Morgan is a global leader in financial services, offering solutions to the world's most important corporations, governments and institutions in more than 100 countries. As announced in early 2018, JPMorgan Chase will deploy $1.75 billion in philanthropic capital around the world by 2023. We also lead volunteer service activities for employees in local communities by utilizing our many resources, including those that stem from access to capital, economies of scale, global reach and expertise. With a legacy dating back to 1799, they have a history of demonstrating leadership during times of both economic growth and financial instability.
J.P. Morgan has a long history of being a premier investment bank in the South African market. Today, the firm's footprint includes Cape Town and Johannesburg, where it has a full banking license. J.P. Morgan has proactively embraced the South African government's Broad-Based Black Economic Empowerment agenda. This is based on the belief that the foundations of true transformation lie in a strategy that recognizes the interrelated nature of the scorecard pillars and accords equal importance to each. J.P. Morgan understands that transformation is about building a workable and sustainable strategy rather than scoring points.
Barry Meyers, managing director of JPMorgan’s UK capital markets and sub-Saharan Africa business once told Business Tech saying, “International investors are interested and more open to the African growth story than ever before. “Our own strategy and how we are running our own business reinforces what we believe the landscape to be for other international and South African corporates”.
JPMorgan runs an investment fund, the "JPMorgan Africa Equity Fund". The JPMorgan Africa Equity Fund, worth US$140 million (R2 Billion) in size, is a fund that provides long-term capital growth by investing primarily in African companies. This fund considers financially material Environmental, Social and Governance (ESG) factors in investment analysis and investment decisions, with the goal of enhancing long-term, risk-adjusted financial returns.
The JPMorgan Africa Equity Fund portfolio includes listed counters such as Naspers, Safaricom, Commercial International Bank, Endeavour Mining, B2Gold, Attijariwafa Bank, Guaranty Trust Bank, FirstRand, Maroc Telecom, and Scatec.
The bulk of the JPMorgan Africa Equity Fund is 41% in South Africa, and the rest in Morocco, Nigeria, Kenya, Egypt, Ivory Coast, Mali, Ghana, Zambia, Mauritius, and DR Congo.
The fund is invested in Materials, Financials, Communication Services, Consumer Discretionary, Consumer Staples, Utilities, Energy, Industrials, Information Technology, and Health Care.
Citibank operates in 160 total countries worldwide and are physically on the ground in 100 of them. Today, Citi manages 200 million accounts worldwide. Citi Commercial Bank operates in 32 countries globally, nine of them in Central Eastern Europe and the Middle East, with seamless access to the wider Citi network.
Citi first established a presence in South Africa in 1958 and re-entered the country with a representative office that was converted to a full branch in July 1995. Since then, they have grown to become the country's largest foreign bank and the sixth largest commercial bank, with capital and reserves representing over one quarter of the capital of all foreign banks operating in the country.
Citibank provide a broad range of financial products and services, including corporate finance, cash management, corporate and investment banking and also treasury services such as foreign exchange, derivatives and trade finance. Whilst it remains unclear of how many banking clients they have in South Africa or Africa, their major clients include national and subnational governments, agencies, public organizations, large NGOs and development finance institutions globally. Citibank have three branches in South Africa; Johannesburg, Cape Town and Durban.
Citibank says they are “committed to the economic transformation process in South Africa, which incorporates market opportunities and growing customer segments. We recognize that by embracing a philosophy of Black Economic Empowerment, we have the opportunity to play a significant role in the upliftment of historically disadvantaged communities. Citi has received an A rating on its audited BEE Scorecard from the Financial Sector Charter Council. We are committed to our business in South Africa, and we are one of the most prominent financial services firms in the country. From Johannesburg and Cape Town, we provide clients with products and services from across our asset management and corporate and investment bank lines of business. Our branch in South Africa is an authorised financial services provider”.
Citibank is also heavily invested in the Johannesburg Stock Exchange, through their stockbroking business. Citi Global Markets Pty Ltd is Citi's equities trading arm in South Africa, which commenced business in July 2001 and now commands a healthy market share.
A look into these two global giant banks from America, gives hints of the vast potential there is in investment banking, fund management, and corporate banking, as there are international investors looking into pumping money into Africa.
Source: Citibank, JPMorgan
