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Top 1000 World Banks – Africa’s biggest banks endure a tough year

South Africa's lenders, for so long the shining light in Africa's representation in The Banker's Top 1000 rankings, retain the top spots in the regional list but mostly with falls in their Tier 1 capital. The good news, however, comes from the direction of Morocco's financial institutions.
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Top 1000 World Banks Ranking 2014 – Africa

South Africa’s banking sector, Africa’s largest in terms of Tier 1 capital and assets, has endured yet another tough year. With the exception of FirstRand, all six of its lenders in Africa’s top 25 ranking experienced falls in their dollar-denominated Tier 1 capital, reflecting the country’s weak economic growth and the heavy depreciation of the rand, which lost 17% of its value versus the US currency in 2013.

Philip Alexander reports on the full results of The Banker’s Top 1000 World Banks ranking 2014, in the story Top 1000 World Banks 2014: Back on track?

Standard Bank retains its position as Africa’s largest and most profitable lender, with Tier 1 capital of $10.57bn and pre-tax earnings of $2.9bn, but has fallen in the global ranking from 109th to 116th place. Its nearest rival, FirstRand, has $7.83bn of capital in this year’s Top 1000, while Nedbank, also from South Africa, takes third with $5.11bn (Barclays Africa Group, previously called Absa Group, would have come third with $5.9bn of capital, but is excluded from the main ranking because it is a subsidiary of the UK’s Barclays). Together, these three South African lenders have $23.5bn of Tier 1 capital, which is a drop of 3.5% from the 2013 ranking.

African Bank, a South African bank specialising in unsecured lending, has experienced a particularly big fall, with its capital decreasing from $1.08bn in the 2013 ranking to $732m this year. As a result, it has fallen in the African ranking from 17th to 22nd.

Other big institutions that have struggled are National Bank of Egypt, the country’s largest lender, and First Bank, Nigeria’s biggest by assets. The former’s capital base has shrunk from $2.1bn to $1.99bn this year, while First Bank has dropped from ninth place in Africa to 13th after its capital decreased from $2.1bn to $1.87bn.

Morocco’s lenders have fared strongly, however. The Tier 1 capital of its three biggest institutions – Groupe Banques Populaire, Attijariwafa and BMCE – has risen 13% to $9.3bn. Each of them is now among Africa’s 10 biggest banks.

Togo-based pan-African lender Ecobank, despite enduring a corporate governance crisis in 2013, has continued its rise. Its Tier 1 capital has increased by 2.7% to $2.05bn, enough to move it from 10th position in Africa to eighth.

Africa has 31 banks in this year’s Top 1000 from nine countries – Angola, Egypt, Gabon, Kenya, Mauritius, Morocco, Nigeria, Togo and South Africa. The continent’s share of global profits has slumped from 2.3% in 2013's ranking to 1.6% in 2014's. It is, however, still the region with the highest return on assets (ROA). Its banks made an aggregate ROA of 1.93%, beating second placed Central and South America, whose banks generated a 1.74% ROA.

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