Bob Diamond: Banking on the Future

Former Barclays CEO Bob Diamond is mining Africa’s potential with Atlas Mara, his latest venture

Bob Diamond refers to it as “the perfect intersection between doing good and doing well.”

In 2013, the New York banker teamed up with Ugandan entrepreneur Ashish Thakkar with the bold ambition of building the leading financial services institution in sub-Saharan Africa. The continent represents a huge source of potential: According to the World Bank, just 34 percent of African adults have bank accounts, compared with 94 percent of adults in developed countries.

Atlas Mara Ltd., publicly traded on the London Stock Exchange (ATMA), is earnestly trying to level the playing field on the continent. In its first 18 months, the company acquired eight banks in seven countries, “and we’re in the process with two or three transactions as we speak,” said Diamond, reached by phone as he boarded a flight from Paris to New York in early March.

“We are investing time, money, and effort … in an area where the more successful we are, the more we’re helping to create jobs and economic growth in a very important area of the world.”

Interestingly, Diamond considers Africa’s lack of traditional banking infrastructure to be an advantage. Technology that is available today “can leapfrog the developed economy banking, which is so branch- and paper-reliant,” he points out. Eighty percent of African people have never even walked into a local bank branch, he says, adding that half of the money movements that happen by mobile phone every day originate in Africa. Technology has effectively supplanted the brick-and-mortar financial institution in developing countries.

Diamond is familiar with Santa Monica startup InVenture, which is using technology to allow banks to give more lending to African consumers and African small businesses (see p. 64). “We have to find new and innovative ways to discover who is an appropriate credit risk and who isn’t,” he says. “We don’t have the data, the files and the credit cards [to create credit profiles] that you have here in the U.S.,” he says.

It was just eight years ago that Diamond orchestrated the acquisition of the fourth-largest investment bank in the U.S., Lehman Brothers. Founded more than a decade before Abraham Lincoln became president, the financial institution became a symbol of troubled financial times when it filed for Chapter 11 bankruptcy protection on September 15, 2008. At the time, Diamond was president of Barclays. (He would go on to serve as group chief executive from 2011-2012.)

“We are investing time, money, and effort … in an area where the more successful we are, the more we’re helping to create jobs and economic growth in a very important area of the world.”

“It was probably one of the most unbelievable two-week periods of my life,” recalls Diamond. “With a small group of my team and with the full support of our CEO and board … we discussed with Lehman Brothers as well as with the Secretary of the U.S. Treasury [Henry] Paulsen and with President of the New York Fed [Timothy] Geithner the acquisition of Lehman Brothers by Barclays.” Diamond says the deal ended up saving 10,000 jobs in New York, as well as salvaging the pensions of employees of all levels, some of whom had put in 40 years of service or more.

A native of the Boston area, Diamond began his career as a professor at the University of Connecticut. He figured teaching was his calling, but he was soon introduced to the world of finance and eventually joined Morgan Stanley, working his way up the ranks. He counts many mentors who were instrumental in helping him develop his management ability and interpersonal skills, but in terms of “falling in love with the markets,” as he puts it, that happened naturally.

“The financial markets are incredible,” he says. “They force you to learn about the world [and] they’re a great judge of talent. They don’t favor anyone; sometimes they’re harsh but they’re also fair.”

Bob Diamond