Absa Group Central Bank Mandatory Reserves Coverage (MIGA-14385)

Countries
  • Kenya
Where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Bank Risk Rating
FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jun 14, 2019
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Absa Group Limited
The holder of the loan, grant, or other investment.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 110.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ MIGA website

Updated in EWS Dec 11, 2019

Disclosed by Bank May 3, 2019


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Project Description

This summary describes equity investments by Absa Group Limited (Absa Group) in its subsidiary in Kenya, Barclays Bank of Kenya Limited (subsidiary). The investor has applied for MIGA guarantees of up to US$110 million in mandatory reserves cover for a period of up to 15 years. 

The aim of MIGA’s proposed guarantees is to help Absa Group reduce the risk of some of its assets, which would lead to a reduction in the group’s RWA on a consolidated basis. Absa Group plans to deploy this headroom of consolidated RWA across its Africa operations, including Kenya, thus increasing the potential reach, development impact, and financial returns of the foreign investment. MIGA’s proposed coverage to Absa Group is aligned with the most recent World Bank Group’s strategy for Kenya, as it seeks to promote private-sector-led growth via increased access to finance in the country and to promote sustainable investments.

 

 

Investment Description
  • Multilateral Investment Guarantee Agency (MIGA)
Private Actors
  • ABSA Group -- Fund Manager

Absa Group, South Africa-based, is one of the largest pan-African financial institutions in terms of total assets with operations in ten countries in Sub Saharan Africa. Its subsidiary banks outside of South Africa are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory reserves contribute to Absa Group's overall risk-weighted assets (RWA) at the consolidated level, resulting in less headroom for other assets at a given level of capital.

Contact Information

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400

E-mail: cao-compliance@ifc.org

ACCOUNTABILITY MECHANISM OF MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/