Sub-Saharan Africa provides 18 banks in the 2007 Top 1000, a big increase from just 10 banks two years ago. And a key contributory change is that South Africa is now not the only banking force in the Top 1000 – Nigeria and others are beginning to play a part.
Although the five South African banks dominated last year’s Sub-Saharan listing of 15 banks, accounting for 83.9% of the combined Tier 1 capital of $17bn, the 2007 ranking shows the 11 Nigerian banks taking a much larger share of the African banking pie along with banks from Togo and Mauritius. This year, the South Africans expanded their total Tier 1 capital by 34.3% but now only account for 72% of the aggregate $22.8bn, a larger total ($16.4bn) but a lower proportion.
It is important to note, however, that Barclays’ acquisition of ABSA Group in 2005 has taken ABSA out of the ranking as a South African bank. However, it still remains a force in the region and is the second largest bank in South Africa.
With real economic growth in South Africa achieving 5% in 2006 and record expansion in construction helping make a record 34 consecutive quarters of economic growth since 1998, the South African banks continue to produce strong performances. Standard Bank Group remains the biggest sub-Saharan bank by a large margin. Its Tier 1 capital expansion of 35.4% to $6.5bn makes it almost twice the size of Nedbank and well over twice the size of Investec and FirstRand Banking Group. But, as important as Standard Bank is in terms of South Africa and Africa in general, it remains relatively small on the world stage in 106th place.
Return on capital remains strong at South African banks. Standard leads the way with 40.4% (against a country average of 37.9%), slightly down on last year’s record 42.8%.
The important story this year is the expansion of Nigeria’s banks. The total Tier 1 capital of the 11 banks in the 2007 Top 1000 reached $5.8bn, more than 135% up on last year’s total of $2.5bn. A significant part of this increase comes from Intercontinental Bank, whose capital has increased almost fivefold to $1.3bn from $273m last year. Union Bank of Nigeria jumps into second place in Nigeria, more than doubling its capital to $783m. And Zenith International Bank has expanded similarly, reaching $738m.TOP 18: SUB-SAHARAN AFRICA ($M)
