AFRICAN BANKS the Race to Transform This Is a Free PDF of Our Previous Edition of the Top 200 Banks
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2019 REVIEW TOP AFRICAN BANKS The race to transform This is a free PDF of our previous edition of the Top 200 Banks. For the latest edition, subscribe to The Africa Report, or get in touch - [email protected] The Africa Report Subscribe now to get the full picture Discover The Africa Report TOP 200 AFRICAN BANKS 2 Contents 03 OVERVIEW Bank to the future The race to transform 05 RANKING Our exclusive list NICHOLAS NORBROOK [email protected] 11 PROFILE Godwin Emefiele As these words are written – in fintechs that are not encumbered 13 SOUTH AFRICA early 2021 – the outlook could not brick-and-mortar legacies. Pain at home and joy be more different for the African With the pandemic switching the abroad banks measured in this 2018 rank- digital economy into overdrive, ing. Pandemic obliges. The debt banks that get left behind will find overhang many African countries it harder than ever to catch up. 17 INTERVIEW are currently facing was present The consumer of tomorrow does Jim Ovia back then but was nowhere near as not want to stand in a line in your systemically threatening. banking hall, ever. 19 DEBATE Zambia became the first default As Microsoft founder and phi- Private equity vs. of the coronavirus era in November, lanthropist Bill Gates once said: public markets when spiraling debts forced the “Banking is necessary, banks are country to miss a payment to re- not”. James Mwangi, the CEO of imburse its creditors. Kenya’s Equity Bank, told The 23 FINTECH But there are echoes that will be Africa Report last September that Is there a bubble in familiar. Profitability for Africa’s while its investment in the bank’s Nigeria? banks in 2018 had been hit by an- technological overhaul made him other major event, the collapse of feel relatively confident on that 26 ENERGY FINANCE commodity prices in 2015, which had front, the arrival of ‘Big Tech’ on More wary of betting worked its way through the system. the scene was keeping him awake on barrels South African banks were being at night. We will be tracking the dragged down by their sovereign big competitors from China and rating. Nigeria’s central bank was Silicon Valley this year, especially 28 INTERVIEW running a foreign-exchange policy during our new event, The African Ade Ayeyemi that beggared belief (and, perhaps, Financial Industry Summit, which made the average person on the will be held online on 10 and 11 street poorer too, stoking inflation March 2021. because of an unwillingness to fund We will also be undergoing big the import of foodstuffs). changes this year at The Africa Plus ça change.... Report – with the digital trans- Another of the key themes evoked formation not sparing us either. back then seems even more rele- Our paywall will go up in March, vant today. “Telecoms companies and we want all the readers of and fintechs are snapping at banks’ these special PDF downloads to heels, carving out strips from what get early-bird access. To register, used to be the preserve of general email us at feedback@theafricare- service banks.” This is a growing port.com, and we will send you risk, especially for mid-tier banks, an exclusive deal for yourself or This PDF is free, and not for resale / Think green! Only print if necessary COVER ILLUSTRATION: ADOBESTOCK COVER ILLUSTRATION: with an ever growing number of your company. The Africa Report Subscribe now to get the full picture Discover The Africa Report 500000000 400000000 300000000 200000000 100000000 0 TOP 200 AFRICAN BANKS 3 The race to transform From the commodity crashes to the rise of a new breed TOTAL ASSETS BREAKDOWN TOTAL LOANS ($bn) TOP 10 MOST PROFITABLE of technology-driven niche players, the traditional era of North Africa West Africa Central Africa North Africa West Africa Central Africa East Africa Southern Africa East Africa Southern Africa Standard Bank Group banking is finished. Our exclusive list of Africa’s Top 200 500 South Africa $2bn banks shows it: the profitability of Africa’s Top 200 banks in $1.51trn $1.49trn $1.46trn $1.74trn $1.66trn 400 US dollars in 2018 took a sizeable hit – reaching the lowest FirstRand Banking 300 Group $1.94bn level since 2014. Africa’s top 10 profitable banks represent South Africa nearly 50% of the total profits of our Top 200. A special 200 Commercial Bank mention should go to Stanbic Uganda (#158), which made 2014 2015 2016 2017 2018 of Ethiopia 100 $1.29bn number 10 on that list – proof that size and profitability are Ethiopia not necessarily correlated. +92 TOP 5 FOR ASSET GROWTH 0 Standard Bank % US$bn 2014 2015 2016 2017 2018 of South Africa $1.11bn Of course, some wounds are self-inflicted. Attijariwafa South Africa Bank (#7) is still trying to digest its purchase of the Egyptian +62 AFRICA’S DEPOSITS ($bn) Nedbank Group subsidiary of Barclays Bank. Others have hitched a lift on +56 500 $934m South Africa an economic upswing. The top three Egyptian banks – Misr +41 +34 400 (#8), CIB (#18) and Alahli (#23) – have all climbed in our Attijariwafa Bank ranking compared to last year. 300 Morocco $704m But the collapse in oil and other commodity prices that 1.05 1.04 1.11 1.85 2.49 200 Zenith Bank began in late 2014 and continued through 2015 has wreaked $635m ECOBANK COOPERATIVE FIRST BARCLAYS EXPORT 100 Nigeria havoc with economic operators across the continent. The ZIMBABWE BANK OF BANKING BANK DEVELOP. Zimbabwe OROMIA CORP. OF GHANA BANK OF banks in big commodity exporters were among the first in HOLDING EGYPT 0 National Bank Ethiopia Ghana 2014 2015 2016 2017 2018 of Egypt $564m line to suffer and non-performing loans (NPLs) bloomed. Zimbabwe Egypt Egypt Take First Bank of Nigeria (#22), which is well diversified TOP 5 FOR ASSET DECLINE TOTAL NET INTEREST INCOME BREAKDOWN ($bn) Banco de Fomento across the economy. Its exposure to problematic companies % US$bn BANCO 50 de Angola $561m proved a significant hiccup, pulling down its asset quality CAIXA Angola BANCO DE BANCO DE GERAL BANCO 40 and preventing it from taking on other, more productive POUPANÇA BANCO FOMENTO TOTTA DE MILLENNIUM ABSA Bank E CRÉDITO SOL ANGOLA ANGOLA ATLÂNTICO* $555m lending. On an earnings call, Urum Kalu Eke, director of 30 South Africa Angola Angola Angola Angola Angola FBN Holdings, which owns First Bank, explained how “the 6.15 1.68 5.49 1.17 4.38 20 NPL ratio is down to 14.5% as of June 2019, from 25.9% at TOTAL PROFITS ($bn) 10 December 2018. […] It [offers] significant headroom for us to 30 increase our exposure in the very lucrative oil and gas sector, -34 -32 0 25.2 25.3 -40 -37 where we’ve been shut out effectively over the past three years.” -45 2014 2015 2016 2017 2018 25 22.4 21.4 21.6 *Ex Banco Privado Do Atlantico Still at number one, South Africa’s Standard Bank (#1) SOURCE: THE AFRICA REPORT NUMBER OF BANKS 19.8 managed to post profits of more than $2bn in 2018 but is 8 20 constrained by the sinking sovereign rating, which is drying not been successful, often driving borrowers into the hands 56 49 31 56 up the flows of capital towards South Africa. of under-regulated online lenders (see page 52). 15 South Africa’s problems are echoed elsewhere on the Regulators have been active in Ghana, too, demanding 2013 2014 2015 2016 2017 2018 continent. As the US Federal Reserve slowly started raising in 2017 a capital increase from ¢120m ($22.2m) to ¢400m, rates in recent years, yield-hunting investors withdrew with a deadline of end-2018. The multi-year banking crisis from Africa. The knock-on for banks has been limited, that ensued – with 420 institutions failing – has been much partly because governments are dependent on financing criticised, including by President Nana Akufo-Addo, who from domestic financial institutions. But while that works called the Bank of Ghana’s response “lax”. out OK for banks in the short term – see the stellar results Chinese investment has provided some respite. Likewise, for 2017 – the result is industry, services and agriculture all the cutting of US interest rates – the first time it has happened struggling to get loans, which drags the economy down. since the financial crash of 2009 – could precipitate a new wave of investors seeking yields in frontier and emerging Neither a borrower nor a hoarder be markets. That in turn could see a fresh influx of cash and Nigeria’s central bank has pushed through a law requiring offer banks some space to consolidate and grow. loan-to-deposit ratios to be 60% by 20 September 2019 – a But there are other rocks in the water, especially for move it hopes will force banks to start lending rather than those banks stuck in the middle. The mobile revolution hoarding. Kenyan lawmakers attempted the same, this time has allowed a new swath of ‘branchless’ banks to enter using an interest-rate cap, which most analysts agree has the market. South Africa’s TymeBank is just one of This PDF is free, and not for resale The Africa Report Subscribe now to get the full picture Discover The Africa Report 500000000 400000000 300000000 200000000 100000000 0 TOP 200 AFRICAN BANKS 4 TOTAL ASSETS BREAKDOWN TOTAL LOANS ($bn) TOP 10 MOST PROFITABLE North Africa West Africa Central Africa North Africa West Africa Central Africa East Africa Southern Africa East Africa Southern Africa Standard Bank Group 500 $1.51trn $1.49trn $1.46trn $1.74trn $1.66trn South Africa $2bn 400 FirstRand Banking 300 Group $1.94bn South Africa 200 Commercial Bank 2014 2015 2016 2017 2018 of Ethiopia 100 $1.29bn Ethiopia +92 TOP 5 FOR ASSET GROWTH 0 Standard Bank % US$bn 2014 2015 2016 2017 2018 of South Africa $1.11bn South Africa +62 AFRICA’S DEPOSITS ($bn) Nedbank Group +56 500 $934m South Africa +41 +34 400 Attijariwafa Bank 300 Morocco $704m 1.05 1.04 1.11 1.85 2.49 200 Zenith Bank $635m ECOBANK COOPERATIVE FIRST BARCLAYS EXPORT 100 Nigeria ZIMBABWE BANK OF BANKING BANK DEVELOP.