On the market: Offerings set to increase as new banks enter and existing players expand

Whilst still concentrated, the market is becoming increasingly contested, with foreign banks establishing a presence, as well as the emergence of domestic institutions. The sector is gradually feeling the impact of this growth through greater reach and more product differentiation. With the Bank of Central African States’ (Banque des États de l'Afrique Centrale, BEAC) capital requirements at an admittedly modest CFA10bn (€15m), lenders will have to expand their intermediation to succeed in the Gabonese market. Although some lenders’ expansions beyond the two key cities of Libreville and Port-Gentil may add to costs, it will give them an edge in an increasingly competitive and crowded market. Meanwhile, all key banks have been building out their networks within Libreville, following the capital’s new suburbs to the north and south.

BIG PLAYER: The sector is dominated by three institutions, accounting for 79.66% of deposits, 76.73% of loans and 84.51% of accounts by April 2013, according to the Professional Association of Credit Institutions of Gabon (Association Professionnelle des Etablissements de Crédits du Gabon, APEC). The market leader is BGFI, with nine subsidiaries outside of Gabon. It also runs consumer finance and leasing firm Finatra, microfinance institution LOXIA Emf, insurance underwriters and the only Gabonese stockbroker on the regional exchange. The group is Gabonese owned, with private investors holding 39%, followed by regional holding group Compagnie du Komo with 25% and state-run Banque Gabonaise de Développement (BGD) with 7%.

With assets of CFA1.26trn (€1.89bn) in 2012, BGFI’s Gabon operation accounted for 50% of the market; the bank’s lending totalled CFA809.5bn (€1.2bn), while its deposits were at CFA1.01trn (€1.5bn). Traditionally focused on corporate lending (the bank held only 10.09% of accounts, or 26,886, in April 2013), it is expanding its network of branches and ATMs beyond the two main cities, opening branches in Okala and Oyem, reintegrating Western Union and issuing Visa cards. It has also partnered with Airtel to launch a mobile money platform since 2012. The bank has maintained its profitability in recent years, recording CFA18.5bn (€27.75m) in net profits in 2012, which has allowed it to increase its shareholder equity from CFA57.9bn (€86.8m) in 2011 to CFA60.76bn (€91.1m) in 2012 through retained earnings. BGFI is also planning a CFA80bn (€120m), seven-year bond issue on the regional stock exchange in 2013.

OLD CONTENDER: Since 1973 France’s BNP Paribas has had a minority stake (47%) in the second-largest lender, Banque Internationale pour le Commerce et l’Industrie du Gabon (BICIG), although it has been seeking to buy a majority from either the government, which owns 26% and has refused, or private investors, who hold 27% and with which discussions are still ongoing.

With 13 branches, a total of 19 banking outlets and the market’s largest network of 45 ATMs, the lender has not expanded its network in the past year, but launched its standalone mobile money platform, BICIG Mobile, in December 2012. BICIG had a 38.08% share of accounts (101,415) and 50,000 Visa cards, and accounted for 15.67% of deposits (CFA361.9bn, €542.8m) and 13.09% of lending (CFA369bn, €553.5m) in April 2013. The bank posted weaker results in 2012, with net profit of only CFA4.77bn (€7.1m).

TOUGH RIVAL: Originally founded in 1962, the third-largest bank, Union Gabonaise de Banque (UGB), was sold to Morocco’s Attijariwafa as part of French Credit Agricole’s disposal of banks in five African markets in 2009. Aside from Attijariwafa’s 59%, UGB is backed by the state both directly (26%) and through BGD (4%), as well as by local insurer Ogar Group (4%), Delta Synergie (5%) and private local investors (2%). Growing from five branches to 18 in the past three years and 40 ATMs, UGB has been most eager to develop retail banking beyond the two main urban markets, in Franceville, Moanda and Tchibanga, for instance.

“This strategy seems to be aimed at giving them an edge on the main market, by catering to Libreville residents when they travel inland,” Christophe Herbaut, manager at Ernst & Young, told OBG. The strategy has already born fruit, with assets of CFA350bn (€525m) and net profit of CFA6bn (€9m) in 2012. UGB’s customer base has grown from 35,000 in 2009 to 96,784 in April 2013, or 36.34% of the market, accounting for 12.99% of deposits with CFA300bn (€450m) and 11.65% of loans with CFA300.6bn (€450.9m).

FOREIGN ENTRANTS: While Citibank has focused on government and blue-chip corporates, newcomers like Ecobank have rapidly expanded accounts, deposits and lending. Citi focuses on its core market of government and blue-chip corporate clients with over CFA10bn (€15m) in annual turnover, but new entrants have sought a piece of this segment as well as what they see as an under-served small and medium-sized business (SME) and retail market. “There is still room for new entrants, as long as those new banks position themselves in very specific markets,” Jean-Baptiste Siate, Ecobank Gabon’s managing director, told OBG. Established in Gabon since 2009, the Togo-based Ecobank has 33 African subsidiaries and has expanded rapidly to eight branches, with five more planned during the course of 2013. Recording its first profit of CFA1.6bn (€2.4m) in 2012, Ecobank has the fourth-largest deposits with 5.45% of the total at CFA125.9bn (€188.8m) and the fifth-largest loan book, with 5.44% at CFA122.8bn (€184.2m) in April 2013.

NEW COMPETITION: The smallest customer base of private banks aside from Citi, with roughly 3000 accounts (1.11% of total), Orabank remains a niche corporate player, with 7.58% of lending at CFA133.3bn (€200m) and 5.29% of deposits at CFA122.3bn (€183.4m) by April 2013. The latest foreign arrival in late 2009, Nigeria’s United Bank for Africa (UBA) is the smallest privately owned bank. With just one branch, UBA’s Gabonese operation is the bank’s 17th new market in Africa. While it has participated on a number of large deals like private hydropower producer Coder’s $234m hydroelectric dam, it is still working to generate both deposits and demand for loans. It accounted for only 1.46% of deposits and 0.94% of lending in April 2013.

La Poste created PosteBank in late 2012, and was in the process of mobilising the CFA10bn (€15m) equity in mid-2013. With roughly 40 functional post offices nationwide, new management was appointed in early 2013 and Poste Maroc, which underwent a similar transition, is providing technical assistance in setting up the bank, opening branches in Libreville and Port-Gentil in mid-2013, and offering remittance services to start.

SEGMENTATION: While the immediate impact of greater competition since 2009 has been on the borrowing costs of blue-chip local corporates, these have stabilised at 7% annually by 2013. New entrants, such as Société Générale, which opened a bank in the Republic of the Congo in 2012, are said to be eyeing the market. As lenders in this increasingly crowded market implement their growth plans, the sector seems set to segment between corporate and retail. While newcomers are building up their branches, others are rolling out new channels like mobile money. The product offering is only set to increase for those who are banked.