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African banks remain minor players in the world –The Banker

3 months ago
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A Financial Times publication, ‘The Banker’ has revealed that Africa
continent’s banking industry accounted for less than 1 per cent of
global Tier 1 capital, making it the smallest regional player, behind
Latin America with, just over 2 per cent, and the Middle East (4%) and
way behind the giants of Asia, Europe and North America

The publication which is in charge of examining Top 1000 World Banks
ranking, stated this after a recent review of the African continent
between 2000-2019.
Business News Report online reports that  that the aggregate pre-tax
profits of African banks , that is, the performance in capital terms
of the top five African countries – South Africa, Egypt, Morocco,
Nigeria and Kenya, is impressive, with South Africa, in particular,
leading the way.

According to the Banker “The performance in capital terms of the top
five African countries – South Africa, Egypt, Morocco, Nigeria and
Kenya – is impressive. In the table of top African countries by Tier 1
capital, 2000-2019, by rank, South Africa has held first place
consistently while other countries have jostled for position beneath
it. Nigeria, for example, was in fourth place up until 2006, it then
moved up to second for a 10-year period until 2016 but has since
fallen back to fourth, reflecting the fluctuating fortunes of the
country’s banking sector.”

“Egypt held the second position in 2000, then fell to fourth after
2008, but has since recovered its second spot. Morocco and Kenya,
meanwhile, have been more consistent with the former mostly coming in
third place and the latter placing continuously at fifth. South
Africa’s banking sector towers over the rest of the continent’s and is
roughly equivalent to the other four countries added together, despite
the fact that Nigeria’s $495 billion gross domestic product is about
one-third larger than South Africa’s $370 billion, based on the latest
International Monetary Fund figures”.

“The table of top African banks by Tier 1 capital tells a similar
story of South African dominance over the past 20 years with Standard
Bank consistently in the number one spot, despite its Tier 1 not
showing the spectacular rises that we see for many banks, especially
Asian banks, during the period under review. In fact, Standard Bank
which placed 149th in the 2019 Top 1000 World Banks ranking, with $9.7
billion of Tier 1, has reduced its absolute capital in the past few
years with a 3.72% drop from 2018 to 2019, reflecting the economic
troubles in its home country. The same is true of the other major
South African banks but this has not undermined their grip on the
table with First Rand in second place, Absa third, Nedbank fourth and
Investec eighth. The strongest Nigerian player is Zenith Bank in ninth
place , that is, 415th position in the 2019 Top 1000 ranking.”

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