Banque de l'Afrique occidentale
Main bank of issue in French West Africa, later restructured after financial crisis.
The Banque de l'Afrique occidentale (BAO) was a bank headquartered in Dakar that served as the main commercial bank and bank of issue in French Senegal and French West Africa for much of its history. It was known as the Banque du Sénégal from 1853 to 1901 and later as the Banque internationale pour l'Afrique occidentale (BIAO) from 1965 to 1990. Following the independence of most of France’s sub-Saharan African colonies in 1960, the bank remained a major financial institution across 17 African countries until financial turmoil led to its dismantling in a restructuring led by the Banque Nationale de Paris.
Quick Facts
- Founded
- 1853 (as Banque du Sénégal)
- Headquarters
- Dakar
- Also known as
- Banque du Sénégal (1853–1901), Banque internationale pour l'Afrique occidentale (1965–1990)
- Role
- Main commercial bank and bank of issue in French Senegal and French West Africa
- Key event
- Dismantled in restructuring led by Banque Nationale de Paris after late 1980s financial turmoil
Facts from the source article.
Banque du Sénégal
The Banque du Sénégal was established by decree of Napoleon III as a discount and credit bank, commencing operations in 1855 in Saint-Louis, then the capital of French Senegal, under governor Louis Faidherbe. An agency opened in Gorée in 1867, and the head office moved to Dakar in 1884 as that city grew in importance. A branch in Rufisque followed in 1899, the last of the colony's Four Communes. Ownership was tied to the number of slaves owned or sold at the time of compensation legislation after abolition; the Bordeaux trading house Maurel acquired 73 percent of the capital, with other shareholders including Teisseire and Beynis, the Marseille house Charles Bohn, and five mulattoes. The bank received a 20-year privilege to issue bearer banknotes, renewed in 1874, though early commercial exchanges still used convenience currencies such as gold powder, cowrie shells, iron bars, Maria Theresa thalers, silver piastres, cotton loincloths, and blocks of compressed rock salt. After 1894, the issuance privilege was renewed only annually, and the bank chose not to expand beyond French Senegal, while the French government sought a bank capable of issuing money for all its sub-Saharan African colonies.
Banque de l'Afrique Occidentale
In 1901, the Banque du Sénégal was restructured and its legal home shifted from Dakar to Paris, first located at 78 rue de Provence, mirroring a similar move by the Banque de l'Algérie the year before. It was given the authority to issue currency across all of French West Africa. Between 1901 and 1919, it was the sole bank operating in that region, while French Equatorial Africa saw almost no banking presence. Its branch network grew, reaching Conakry in 1902, Porto-Novo in 1903, and Grand-Bassam in 1906. A new office was built on Dakar’s Kermel square in 1903. A Monrovia branch opened in 1904 but lost money and shut down by 1907. In 1910, hoping to become the issuing bank for Madagascar, it changed its name to Banque de l'Afrique Occidentale et Orientale, but dropped it when that plan fell through. That same year, it set up a representative office in Libreville, a careful move into French Equatorial Africa. In 1911, it bought a building at 38 rue La Bruyère in Paris and moved its headquarters there. During World War I, the head office shifted to Bordeaux from September 1914 to January 1915, then went back to Paris. In 1917, the bank asked for permission to open a Douala branch, which finally opened in May 1921. In 1918, its currency-issuing role was expanded to include French Equatorial Africa, Cameroon, and Togo. A branch in Lomé opened in October 1922. The issuance privilege expired in mid-1920, then was renewed yearly, and from 1925 every six months, until a 1927 agreement extended it for twenty years, lasting until 1949. By that time, the French government held a notable minority stake but did not choose the bank’s leaders.
Banque Internationale pour l'Afrique Occidentale
In 1965, the BAO negotiated with the First National City Bank of New York (FNCBNY, later Citibank) to inject fresh capital. The BAO retained its property assets, renaming itself the Compagnie Financière France-Afrique (Cofifa), while transferring its African banking operations to a new entity, the Banque internationale pour l'Afrique occidentale (BIAO), in which FNCBNY invested. Cofifa owned 51 percent of BIAO's equity, FNCBNY 49 percent. The BIAO's operations were affected by local politics; by the mid-1970s it was the only private-sector financial institution in Niger. In June 1975, Benin nationalized the BIAO there, merging it into the state-owned Banque Commerciale du Bénin. In other countries, governments required separately capitalized subsidiaries with local stakeholders. By 1976, Banque Nationale de Paris (BNP) held 37.7 percent of Cofifa, giving it effective control over BIAO. In 1977, Citibank exited, selling its shares to UBS (20 percent), Banco do Brasil (20 percent), and Compagnie Inter-Africaine de Banque (CIAB) (9 percent). In 1980, BIAO established a separate subsidiary in Niger, and the Ivorian government took a 30 percent stake in BIAO-Côte d'Ivoire.
Liquidation and aftermath
The BIAO entered severe financial distress at the end of the 1980s, partly due to the oil glut and political turmoil. In 1988, the French government directed the state-owned BNP to lead a restructuring. During 1989, BNP increased its share of Cofifa's equity from 40.5 to 58 percent. In April 1990, BNP initiated a drastic restructuring by indicating it would exit most or all of the BIAO's African operations. BNP exited the BIAO's operations in Côte d'Ivoire and Senegal, which were taken over in rescue operations led by the Central Bank of West African States. The BIAO then initiated a process of orderly liquidation, entrusted to administrator Jacques Piot. BIAO Cameroon was separately liquidated later in 1990. In March 1991, BNP sold the rest of the BIAO's African network to Meridien International Bank Limited (MIBL), a holding controlled by financier Andrew Sardanis and incorporated in the Bahamas. By then, BIAO had no assets left in Africa, and BNP had sold its head office building at 9, avenue de Messine in Paris. BNP was accused of jeopardizing the BIAO to the benefit of its competing network, Banque Internationale pour le Commerce et l'Industrie (BICI), especially after MIBL was itself liquidated amid fraud allegations in 1995. In Burkina Faso, the BIAO was renamed Banque Internationale du Burkina (BIB); by end-1996 its capital was owned by COFIPA (30 percent), Banque Belgolaise (25 percent), the Burkinese government (23 percent), and other domestic shareholders. It was taken over by United Bank for Africa (UBA) in November 2008, renamed UBA Burkina in 2012. In Côte d'Ivoire, BIAO-CI was fully government-owned until an 80 percent stake was acquired by Banque Belgolaise, which later sold to a consortium led by NSIA; the bank was renamed NSIA Banque in 2014 and went public in 2017. In Gabon, the BIAO was liquidated, as it had been earlier in Cameroon.
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