Financial equities

Overally most of the growth in the equities markets in Kenya, Zambia, Botswana and Nigeria have all been from the financial services sector. The financial services sector in Africa outside South Africa remains one of the most dominant industries which is currently experiencing major consolidations, restructuring and mergers. In Nigeria the consolidation of the financial services sector of more than a 100 banks to as low as 25 banks has seen a huge jump in banks 's average assets and increased capital and lending infrastructure. The financial services sector has also opened up to public market through a plethora of public listing IPOs and mergers. This has improved investor confidence , innovation, good governance. Regional expansion is another strategic focus of most financial institutions into East Africa, West Africa and Central Africa. A number of Pan African banks are slowly creating a foothold in major markets such as Ecobank, Standard Bank, Zenith Bank, Barclays and Standard Chartered bank. For the next 4 years financial services sector will remain a vibrant sector as banks expand their product and lending portfolio, introduce credit, micro finance and housing schemes which will fuel more economic development . Some key financial services AVI will focus on are Equity , CFC , Barclays, FNB, and Housing finance. There is increased competition within the banking sector with regards to capital base size. Key signals to look out for within the banking sector remains governance and management capabilities. A number of banks in Nigeria are still not fully public as they are still highly dependant on their founding shareholders and these banks require infusion of new equity investors a classic case in point being the equity investment of a UK equity fund into Equity bank of Kenya which will not only improve on the capital base of the bank but also build a lot of confidence in the bank.

 A close look at one of the financial giants of West Africa and performance over the past 4 years indicates the long term intrinsic value in most of the businesses . Although governance remains a major cause of concern across the financial services sector but certainly returns for long term investors is very healthy . UBA performance over the past 4 years has been highly impressive and also there has been leadership stability over a period of time which improves governance and business continuity.

UBA PERFORMANCE 2004-2008 AUDITED