The ABSA Group has announced the purchase of Global Alliance Seguros, an insurance company in Mozambique, and has stated its intention to expand across Africa, intending to duplicate its insurance and financial products from South Africa in the new business venture in Mozambique.
The purchase price will be disclosed with future financial statements from ABSA, though the purchased company did declare revenues of $25 million. ABSA already has some business interests in Mozambique with the local Barclays there, and has announced its intention, though without any concrete plans, to continue its expansion in Zambia and Kenya in the near future.
Market activity in recent years has seen huge volatility in the banking sector in particular, as the debt and other crises in Europe and the United States have caused enormous difficulty for some of the largest, and formerly most powerful banks in those areas. Many banks have been capitalizing on the trends, with many banks in relatively secure positions purchasing new assets at bargain prices will the market offers up such opportunities. Although many of those opportunities are to be found in developing areas, as is the case with expansion into African markets, many of those opportunities have been seen in developed nations such as the United States and the UK. Banks able to capitalize on such developments will likely see some major opportunities in the near future as some of the world’s largest banks run into difficulty acquiring new assets or exploring new opportunities, opening up doors for smaller, more nimble organizations to expand during the downturn and reap the rewards once the inevitable but perhaps still distant recovery arrives.
Other banks have seen or planned expansions in regions like South America, Southeast Asia, India, and other developing nations, which, though perhaps not as likely to experience the same sort of growth trends that occurred during the mid 2000s, seem set to enjoy some moderate growth in upcoming decades as the middle class expands and open doors to new affluence. African nations, though not likely to experience such a rise in the very near future, will inevitably see the same shift as their economies become more developed, which has been happening in many places across Africa in recent decades.
China in particular has been capitalizing on this trend in particular, whether it is mining or drilling for natural resources or other assets, and seems to have beaten all other nations in positioning itself to benefit from Africa’s rich mineral and oil assets. Though a stable middle class is unlikely to emerge with the same level of excitement among investors that have seen countries like Brazil, India and China become so attractive to investors, the opportunities in Africa are likely inevitable, if long-term. And banks that get there in the meantime, purchasing assets before a major middle-class expansion, are likely to reap the rewards better than anyone who gets there once the hype starts kicking in.
ABSA’s purchase of financial services groups is likely to be a positive strategy for the next decade or two, as the long-term benefits of bargain-basement investment (comparatively) will offer some positive long-term growth for ABSA and other similarly strategizing banking institutions.
![[Valid RSS feed]](http://www.world-class-articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
