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TRADE & INVESTMENT FORUM
UK-COTE D’IVOIRE
PERSPECTIVES ON
BANKING AND FINANCE
LONDON 30OCT2013
MACRO ISSUES
THE OPORTUNITIES ARE CLEAR TO SEE
• There have been challenges. Let’s not dwell on them now
• This month’s feedback from the IMF is more interesting
. . . . Macroeconomic performance in the first half of 2013 was better than
expected, with continued strong gross domestic product (GDP) growth, and
moderate inflation despite increases in some food product prices
. . . . Clear progress has also been made in the implementation of structural
reforms, especially to improve the business climate and strengthen the energy
sector
• Forecast growth is very strong, whoever you listen to :Growth
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2012
2013
2014
Government Forecasts
9.8
9.8
9.1
IMF Forecasts
9.8
8.5
8.0
(Real GDP % change)
MACRO ISSUES
FOREIGN DEBT / BANKING SECTOR
• Given concerted effort, debt now appears
manageable.. ..and the market agrees
 Arrears cleared up with external creditors
 Private creditors agreed a combination of
rescheduling and new money
 The price recovered from 35% in March
2011 to as high as 97.4% since
• Banking sector is in recovery mode
Source : Bloomberg 29/10/2013
 Legacy of non-performing loans but relatively well provisioned
 Capital-adequacy ratios remain above the prudential threshold
 African Development Bank is returning to its rightful home
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IVORIAN BANKING SECTOR
REGULATORY ENVIRONMENT
• Banks in Cote d’Ivoire come
under the prudential
supervision of the Banque
Centrale des Etats de l’Afrique
de l’Ouest (BCEAO) which is
Headquartered in Dakar
• BCEAO is integral to the West
African Economic and Monetary
Union - WAEMU
• Economic and monetary
union across 8 states
• Fomenting stability and
market discipline
• Single currency
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Member Countries of WAEMU
Source : BCEAO website
Diamond Bank’s technology platform makes
banking operations seamless between the four
WAEMU states in which it operates today
EXPORT TRADE
IMPORT AND CURRENCY CONTROLS
IMPORT CONTROLS
There are clear rules which must be adhered
to governing what can be imported and the
forms that need to be filled in.
CENTRALISED MANAGEMENT OF FOREIGN EXCHANGE
> The XOF is pegged to the Euro
 The link has been clear and steadfast over
many years as the chart opposite shows
Source : OANDA (January 2009 – date)
> Whilst the peg is not a BCEAO-wide solvency guarantee
 Contracts can be negotiated with some price certainty and for imports
priced in €, eliminate hedging costs
 XOF is a managed currency. The importer’s bank (wherever situated in
WAEMU) must wait for BCEAO to release FX. Banks can help here
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IVORIAN BANKING SECTOR
OFFSHORE
Several of the Ivorian Banks have associates operating offshore although very few
banking groups have a full presence in both Abidjan and London.
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DBUK is a UK company with its own capital and
governance arrangements
It was the first bank to be authorised by the new
UK Prudential Regulation Authority (PRA)
DBUK’s parent is one of 8 systemically important
banks operating in Nigeria, public quoted,
profitable and growing strongly
Focus on retail expansion in its home market
and international presences in Benin, Senegal,
Togo and of course Côte d’Ivoire and the UK
For DBUK Côte d’Ivoire is a core niche market
Our Ivorian value proposition is set out in one of
the flyers that can be picked up at our stand
STRUCTURED SITUATIONS
STRUCTURED TRADE
• Agri commodity financing
 Very big business
 Valuable and desirable export crops
 Well established financing mechanisms
to cover annual trade cycle
• Financing farmers locally
• Using crop to secure loans against assigned
contracts or spot market sales to global commodity firms
• Other Commodities (e.g. oil)
 Similar arrangements and with financing linked
to underlying trade cycle for product
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STRUCTURED SITUATIONS
FUNDING FOR INVESTMENT
• Long lead times and repayment schedules
 Putting it out of reach for many commercial banks
• Specialists exist to fill the gap
Regional Development Banks – BOAD recent XOF 26m
Theocratic Development Banks – IDB recent XOF 84m
• And not just by lending money
Investing in skills and governance
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STRUCTURED SITUATIONS
FUNDING FOR INVESTMENT
• There is always a local funding need as well
 Local banks (e.g. DBCI) have a key role to play
supporting local promoters and project partners
• If there is an export credit agency involves there
will often be a portion of residual country risk
 5 – 15% of the amount being lent
 Term country risk weighted 100% for capital
calculation purposes (vs 0% for export credit leg)
 Specialist and niche banks (e.g. DBUK) have a key
role to play in taking on these risks
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Please visit us
• At our stand today
• At our UK offices tomorrow
 Appointments can be arranged today
• At our London and Abidjan offices
any time in the future
Rollo Greenfield
CHIEF EXECUTIVE OFFICER
Diamond Bank (UK) plc - London
Isaac FOLY
MANAGING DIRECTOR
Diamond Bank SA, Côte d’Ivoire - Abidjan
THANK YOU
Please visit us
• At our stand today
• At our UK offices tomorrow
 Appointments can be arranged today
• At our London and Abidjan offices
any time in the future
Rollo Greenfield
CHIEF EXECUTIVE OFFICER
Diamond Bank (UK) plc - London
Isaac FOLY
MANAGING DIRECTOR
Diamond Bank SA, Côte d’Ivoire - Abidjan
THANK YOU