Embattled head of pan-African Ecobank tells us he's open to changes

By Lionel Laurent

PARIS Fri Sep 27, 2013 6:32pm BST
 
(Reuters) - The chief executive of Ecobank (ETI.LG) said on Friday he was open to changing how the African lender decides on compensation and selection of board members amid Nigeria's continuing inquiry into governance issues at the bank.


While CEO Thierry Tanoh reiterated there was no substance to allegations of misconduct by a former employee that first triggered the probe by Nigeria's SEC, he told Reuters there were certain changes he believed could improve transparency and governance at the pan-African bank that operates in 34 countries.

"One issue that has already been raised is that Ecobank's group chairman is also the chairman of the governance committee," Tanoh said in an interview.
"There are other things: we could have a remuneration committee for certain executives and a selection committee for board members."

Ecobank, which is often touted as a pan-African banking success story, has seen its image take a hit from the Nigerian probe. The bank says the group's suspended head of finance, Laurence do Rego, has alleged she was asked to misstate 2012 results and that assets were being unnecessarily sold at a loss.

"I arrived in October 2012 ... How could I have put pressure in order to go back and misstate results?" said Tanoh, who dismissed the alleged activity as illogical and impossible to achieve without misconduct at all levels of the bank. "The SEC is obliged to investigate ...(But) the claims are impossible."

According to Ecobank, do Rego was suspended after she was caught lying about one of her qualifications and only then filed her complaint.

"I obtained permission to suspend (do Rego) ... I informally suggested she look for other opportunities ... And then she triggered everything," Tanoh said.

Looking to the future, Tanoh said he had no intention of stepping down but that calls for Chairman Kolapo Lawson to resign could only be answered by Lawson himself.

The CEO also said that he was confident in Ecobank's ability to drive growth organically and to cut costs.

 He said the bank's cost-to-income ratio should fall to below 70 percent next year from 71.3 percent in the first half of 2013.

"We have to work in a more efficient way ... This could mean taking a bank branch with too many staff and reallocating headcount elsewhere," he said.

Europe set for financial M&A pick-up, private-equity fund says

By Lionel Laurent and Matthias Blamont
PARIS, Sept 11 (Reuters) - Financial dealmaking will pick up in Europe as slow growth and tougher regulation prompts banks to try to slim down and boost profits, the co-founder of private equity firm BlackFin said on Wednesday.

Paris-based BlackFin has built up a portfolio of niche financial businesses across Europe since launching a 220-million-euro ($290-million) fund in 2011.

It expects to make more acquisitions of up to 100 million euros each and is eyeing Spain, Germany and Central Europe, Paul Mizrahi told Reuters in a telephone interview.

BlackFin is part-owner of brokerage Kepler Capital Markets, which recently struck a deal to buy French bank Credit Agricole's CAGR.PA broker Cheuvreux.

The firm sees more buying opportunities in asset management, insurance and equities brokerage and may launch a new fund within the next year or two, Mizrahi said.

While BlackFin focuses on small niche investments, there is increasingly deep-pocketed competition for European banking assets in general. Carlyle Group, Warburg Pincus and Apollo Global Management have all focused on European financials in recent years with varying degrees of success.

"This is a pretty ripe market for investment," Mizrahi said. "We are seeing an increase in the number of asset sales, either by insurers or banks, of subsidiaries that are no longer seen as strategic ... It's a big opportunity."

European banks have been under pressure since the 2008 financial crisis to sell assets to meet tougher post-crisis capital requirements. However, depressed valuations and the euro zone's troubles have deterred major cross-border deals.

"In asset management, whether in France or Germany, we once saw banks actively buying boutique firms ... some were successful but others were left by the wayside," said Mizrahi. "We are really interested in this sector."

BlackFin already owns wealth management advisory firm Cyrus Conseil.

There are also more bolt-on acquisitions to find for businesses like Kepler, which has struck deals with Italy's Unicredit CRDI.MI as well as Credit Agricole; the next step could be acquiring a broker in Spain, said Mizrahi, who also cited Germany as another market where deals could be made.

"We are seeing more and more offers from Germany," he said, noting that the country's banks were "not ahead of the pack" in terms of balance-sheet clean-up.

Mizrahi says BlackFin's portfolio, which includes French paycard provider Moneo, Italian insurance website Chiarezza and German online finance marketplace Finanzen, was overall bought relatively cheaply at around 6 to 7 times earnings before interest, tax, depreciation and amortization (EBITDA).

"We are already getting offers for a few of our holdings," he said. "In a world where there is zero growth, where the overall size of the market is not increasing, you must invest in the small players."

Special Report: Inside Qatar's (Tax-Free) Luxe Property Empire

(Full story)

My investigation of Qatar's property holdings in France, using a mix of public regulatory filings, turned up 6 billion euros' worth of luxury real estate and prompted TV coverage such as this report: http://videos.tf1.fr/infos/2013/le-parc-immobilier-du-qatar-en-france-depasserait-les-6-milliards-8260647.html

 
(Reuters) - The Champs-Elysees lures millions of tourists every year to enjoy shopping at the Elysees 26 mall, poker at the Aviation Club, plush cars and futuristic architecture in the Citroen showroom, or feather-clad showgirls at the Lido cabaret.


But for all their Parisian charisma, none of these attractions are French-owned. They belong to the royal family of Qatar, a resource-rich emirate about 3,000 miles away.

Some Muslims may frown on investments in gambling, alcohol and high-kicking dancers, but over the past few decades the buildings have helped bolster Qatar's global portfolio of trophy assets, including London's Harrods and Singapore's Raffles Hotel. The latest French addition was a chain of upscale malls under the Printemps banner, bought by a fund controlled by Qatari royals in August for 1.7 billion euros ($2.23 billion).

For oil-rich royalty from the Arab Gulf, part of the attraction of the United Kingdom has been the fact it charges no taxes on profits foreign investors make when they sell real estate. Five years ago, Qatar sealed a similar agreement with France. The treaty was agreed by former center-right president Nicolas Sarkozy in 2008, and is one of the most generous Qatar has secured, exempting Qatari investors from taxes on the profits they make when they sell properties.

In a country where 3.6 million people lack decent housing, according to Abbe Pierre, a charity, that is controversial.

Politicians, including some in Francois Hollande's new Socialist government, have been critical. In April budget minister Bernard Cazeneuve called the treaty "an exception that we do not wish to duplicate." Others have asked if the accord brings economic benefit to compensate for the lost tax revenue.

The government has said it is examining the treaty, but an official at the French finance ministry told Reuters that Qatar's purchases don't have to be declared, so it is impossible to see how much tax is at stake.

A Reuters examination of regulatory filings, court documents and other data sheds new light on Qatar's property assets. Reuters mapped around 40 properties in France that are owned by Qataris, a total investment of 5.9 billion euros ($7.8 billion) over the past decade, including 4.8 billion since 2008. At current values they would be worth around 6.3 billion euros.

The Qatari state and its sovereign wealth fund own about a dozen of the properties, together worth around 3 billion euros, Reuters found; the rest belong to members of the ruling al-Thani family. A personal fund set up by Sheikh Hamad bin Khalifa al-Thani, the previous emir, controls about nine of them; his children, including the current emir, six. The rest were bought either by other relatives, or businessmen with strong ties to the al-Thanis, such as Ghanim bin Saad al-Saad.

Each property is owned by a holding company that is itself held by one or more entities, some of them outside France. This makes it hard to track when properties change hands, to see how much tax the French have forgone with the deal.

If there had been no treaty, though, market values at the end of 2012 suggest the French government would have collected at least 145 million euros in tax if the entire portfolio were sold and taxed at the lowest applicable rate, according to Reuters calculations which were assessed by three experts.

While that's less than a day's gas export revenues for Qatar, in France it would equate to a year's pre-tax pay for some 4,500 schoolteachers or nurses.

The Qatari authorities and the sovereign wealth fund Qatari Diar did not respond to questions. Chadia Clot, whose company French Properties Management handles private investments made by the al-Thani family, did not respond.

Gilles Kepel, a professor at the Paris Institute of Political Studies, Paris, said Qatar's financial gains symbolize how the emirate has gained influence by spending its resource wealth, but has also triggered friction.

"Qatar has had a full-speed-ahead investment strategy in France, forged under the previous French administration," said Kepel. "But this has led to antagonism."

 (Full story)