Offshore Professionals Queue for Jobs in South Africa

Recruitment agencies have reported a dramatic increase in the number of international professionals and South Africans living abroad who are seeking employment in South Africa after the waves of retrenchments that have hit the US and Europe.

Penny Chaskelson, the managing director of The Personnel Concept, said the agency had seen an increase of between 20 percent and 25 percent in international professionals inquiring about employment opportunities in South Africa.

“There has been a dramatic increase in responses from all over the world, and that is first and foremost a result of the global financial crunch,” she said. “However, this has also been exacerbated by the fact that some professionals were already happy to move to any location for the right job.”

Georgina Barrick, the managing director of Renwick Talent, said the group had seen a jump in inquiries about employment opportunities in South Africa since September.

Some were from South Africans who had been working in financial services outside the country, mostly in the investment and banking sectors.

“We are receiving about five applications a week and about two-thirds of these are South Africans,” she said. Approaches had come from London and other European capitals, but there had been sudden interest from Egypt, with four inquiries from that country last week.

Martin Westcott, the chief executive of Production Engineers Corporate Services, said the trend of international professionals seeking jobs in the country was logical because the South African economy was still showing some growth.

He said the trend had come at a time when South Africa needed to recruit more skilled professionals to reduce inefficiencies across the spectrum.

“This is as a result of skills shortages. Some companies were even failing to realise their employment equity targets, due to a lack of appropriately skilled personnel.

“The arrival of these personnel in the country could provide us with the opportunity of skills transfer,” he said.

In apparent validation of this trend, the Umsobomvu Youth Fund said that it had taken advantage of the situation by recruiting 20 skilled professionals who would be partnered with 40 young South Africans to develop their skills.

Malose Kekana, the fund’s chief executive, said 15 skilled professionals had been identified. They would be partnered with local youths “with the purpose of grooming them for us. We have put the effects of the financial crisis to good use.”

Kekana said the professionals would not have great cost implications for the fund, as Umsobomvu would pay only for their flights, accommodation and meals.

FIVE BANKING SECTOR PREDICTIONS FOR 2009

Beginning of the year is a time when everybody reviews the past year, draws some conclusions and makes the prediction for the new year. The article below was taken from the blog of the Financial Services Club the analysts of which have provided their own prediction for 2009.

For most, 2009 is fairly obviously a year of rationalisation and implementation.

1) More major European and American banks disappear

We’ve seen plenty of this in 2008 already with JPMorgan gaining Bear Stearns and Washington Mutual, Wells Fargo soaking up Wachovia, and Lloyds TSB taking over HBOS. Expect more.

Already the major banks are closing parts of their businesses in order to try to save costs. Citi is selling off large parts of the group and withdrawing from many overseas markets, and Royal Bank of Scotland is doing the same as they get rid of their insurance divisions.

Expect a lot more of that.

Meanwhile, even with all of that frenetic activity of rationalisation of businesses, expect a few more major bank failures in the US and Europe.

Most likely contenders? Some banks share prices are so low today that the Governments of those banks in those nations will either nationalise them or force them to merge with a stronger player, as the UK Government did with Lloyds TSB and HBOS.

2) There will be some spectacular failures in the BRIC economies. The BRIC economies are interconnected with this debacle, and are also extremely vulnerable to it.

China has seen its growth thanks to European and American consumption of their goods. Those consumers have now disappeared, and China will see some spectacular industry failures this year, along with the banks that back those industry players.

Equally, Brazil and Russia’s growth was fuelled by the need for raw materials for those Chinese manufacturers. As those manufacturers fail, so will some of these suppliers.

Therefore, the BRIC economies won’t come riding to the rescue of the West, but expect to see those markets suffer some of the turbulence Europe and America suffered in 2008.

3) A Global Financial Regulatory Body is formed.

The G20 have started this process already and meet again in April in London.

By that time Barack Obama will be in attendance, and he will want to see urgent action to ensure that this situation never happens again, as do Gordon Brown, Angela Merkel, Nikolas Sarkozy, Hu Jintao and the other nation’s leaders.

Therefore, they will all be as one in agreeing that the Financial Stability Forum needs to go much further, and become the Financial Regulatory Forum, comprised of the leaders of the Fed, FSA, Bafin, AMF and other nation’s regulators.

This global regulatory body will review and refresh Basel II, as well as many other requirements for solvency and reporting.

It may even mean that some key underpinnings of regulatory change already under way such as Europe’s Capital Requirements Directive (CRD) and Markets in Financial Instruments Directive (MiFID) are changed, refreshed and reformed by new rulings focused upon Global Regulatory harmony.

All that starts up again, just as you thought you had finished your regulatory change programmes.

4) The US will drop IFRS Accounting Rules. Mark-to-market accounting will be reworked, and the IFRS will lose the impetus it had in the USA. All of this just after we had gotten to the stage of understanding what the hell these things meant.

The American movement away from GAAP to IFRS will falter as a result of mark-to-market rules, which are even more stringent in IFRS structures. This will see US firms being allowed to either re-interpret IFRS rulings or stick to GAAP.

Either way, it will be significant climb-down from the Bush administrations’ championing of the IFRS accounting approach, which was meant to become the standard for US firms. Barack Obama’s administration will not care a jot for that history though, and will want to make the accounting requirements for banks as simple and supportive as possible.

Therefore, the US Government will drop any promotion of IFRS accounting in the near-term, and will reinterpret GAAP to allow a ‘breathing space’.

5) Solvent banks gain major market share. Related to point (1) is that the biggest difference between 2009 and 2008 will be signs of the real winners starting to shine through. Some are already showing signs such as JPMorgan, Wells Fargo, Santander, HSBC and Standard Chartered.

Expect to see a few more.

These banks are winning on two fronts:

(a) they can acquire and cherry-pick the best of the weak competition, and buy them for a song as Wells Fargo did in grabbing Wachovia off Citi; and

(b) they can acquire and cherry-pick the best of the prime customer markets, as demonstrated by HSBC’s recent campaign to say: “we’ve got money to lend”.

By the end of this year therefore, expect to see a new World Order in the banking markets.

By way of example, Stifel Nicolaus announced their American bank stock tips for 2009 last Friday , which included BancorpSouth, City Holding, Danvers Bancorp, First Horizon, People’s United Financial and TCF Financial. In their report on the sector, the firm states:

“Though not unscathed by the credit cycle, these institutions maintain adequate capital levels, in our view, and, in many cases, will capitalize on weakened competitors … The list represents our best ideas in a sector that we believe will remain troubled from an earnings perspective for the next several quarters.”

Not much confidence in the industry there then.

However, other observers, such as Grant Thornton, say: “Banks, as a sector, may be thoroughly depressed, but we know by the Government’s own actions that they will not be allowed to fail. That makes it almost a one-way bet.”

With this one-way bet, focus upon the winners and the ones with capital.

These are my five market sector predictions for 2009:

1) More major European and American banks disappear

2) There will be some spectacular failures in the BRIC economies

3) A Global Financial Regulatory Body is formed

4) The US will drop IFRS

5) Solvent banks gain major market share.

My only other prediction would be that I expect the major market indices to rise by over 20% by end of year. After all, most of them were halved last year. It will only get better.

Source: Financial Services Club blog

Intercontinental Bank leads in Standard & Poor’s corporate Nigeria rating

Standard & Poor’s (S&P) world’s leading international credit risk rating agency, has assigned ngA+/ngA-1 long and short term Nigeria national scale ratings to Intercontinental Bank Plc, the first to be assigned to any corporate organization operating in Nigeria.

These ratings according to the statement by S & P in London last weekend, affirm Intercontinental Bank’s creditworthiness despite operating in an environment characterized by high economic risks.

S & P had earlier pronounced the bank’s international rating as BB-, which is the highest for any Nigerian bank just as Nigeria’s sovereign rating is also capped at BB-.

According to the statement, Intercontinental Bank’s funding and liquidity profile is robust with a large liquid asset cushion. The loan-to-deposit ratio measured 60% at August 31, 2008 and cash and money market instruments accounted for 40% of total assets.

S&P’s credit analyst, Mathew Pirnie, said “Intercontinental Bank is a Tier 1 Nigerian bank with good presence in the high-end corporate, commercial, public and retail sectors. It was the first bank to reach the Nigerian Naira 1 trillion deposit mark, due to a strong retail deposit portfolio”.

Although the analyst raised concerns about Nigerian economy, he was of the view that Intercontinental Bank’s good capital position, strong market position, and a robust funding and liquidity profile, will mitigate the concerns.

Fitch Ratings had earlier affirmed Intercontinental Bank Plc’s National Long-term ratings at A+. The interpretation according to analysts is that the bank is a low risk financial institution. The agency also affirmed the bank’s international rating at B+, which is the highest for any Nigerian bank as at date.

Intercontinental Bank was declared “Bank of the Year”, recently in London. The Bank emerged tops after rigorous analysis of its financial and business profile along with other banks in Nigeria.

The award is a confirmation of a similar recognition by other reputable international organizations such as African Banker Magazine, and the World Bank/International Monetary Fund Annual Daily which declared Intercontinental Bank African Bank of the Year and Financial Brand of the year respectively, at the spring meeting of the World Bank/IMF in Washington DC, USA

The bank has evolved into one of the largest and most diversified financial services institutions in Nigeria. It also boasts of over 300 branch network spread across the country, linked by cutting-edge IT infrastructure.

Submitted by Emeka Anaeto, Head, Corporate Communication, Intercontinental Bank

INVESTMENT EXPERT SAYS BANKS EXPANSION TO OTHER AFRICAN COUNTRIES IS ANOTHER RAT-RACE

An investment expert, Mr. Jide Ogunleye, has questioned the rationale of Nigerian banks newly found fervor for expanding their operations into African countries with low economic generation capacity. Ogunleye, who is the Chief Executive Officer of Denaro Capitals, said the acquisition and establishment of Nigerian banking brands in countries in West and East Africa lacks appropriate investment judgment.

“I believe that the establishment or acquisition of Nigerian bank brands in these countries is simply an ego tripping by most of Nigerian banks that want to join in the feel of internationalizing their operations. It’s like another rat race to determine which of the banks can boast of establishing its brand outside the country.” Ogunleye said.

“But sincerely, I don’t think it makes investment sense to spend so much money to construct a bank branch in a country where the Gross Domestic Product is not up to that of Lagos State. This is beside the fact that most of the citizens of these countries have been shown by reports to prefer their own banks. I can tell you that a new branch in any urban centre in Nigeria will yield better returns for the banking brand than those outposts they are establishing in the other countries.”

“I am not saying that there is something generically wrong with establishing branches in other countries, but in the case of most Nigerian banks, I feel the choice of those countries do not make a good investment decision. I do not know how the Nigerian bank brands want to take on the indigenous financial institutions in those countries with their solitary single branch. This is beside the regulatory hurdles and fees they have to pay to get the branches established.

“Now, if the argument is to serve the needs of Nigerians resident in those countries, we would need to know the population of Nigerians in the countries, and I can tell you that with the exception of neighbouring Benin Republic and to a little extent, Ghana, the population of Nigerian residents in these countries does not provide for a flourishing bank branch.

“If a Nigerian bank opens a branch in London, South Africa or in the United States of America I think that would be understandable because of the obvious dynamics available in these countries. The population of resident Nigerians are not only appreciable but given the natural inclination for Nigerians to identify with their home brands when they are in the diaspora one can easily conclude that such branches in these countries would be beneficial to shareholders of the banks and Nigerians in those countries.” Ogunleye argued.