Africa's top lenders from 2018.
Citi Algeria married its strong commitment to customer service with a set of strong financial results to once again scoop the Algeria Bank of the Year award. The judges were particularly impressed with Citi’s ability to continuously innovate and enhance its products, in the face of a changing regulatory environment, to better serve its clients.
In local currency terms the bank’s net profits increased by 8% in 2017, while total assets grew by 7%. This was accompanied by an impressive jump in Citi Algeria’s return on equity, which rose to 17% from 13% in 2016. Its cost-to-income ratio, meanwhile, remained steady at 35%.
Regulatory changes targeting trade transactions in Algeria saw Citi introduce pre-shipment financing for its clients in response to clients’ increased funding needs. It also became the first bank in the country to introduce forward contracts, following the central bank’s shift in regulatory stance, which has permitted these products to be traded.
Meanwhile, Citi established a north Africa cluster in 2017 to better serve its clients across the region. This cluster has brought a new, regionally focused value proposition to the bank’s customers and in turn has increased the lender’s client satisfaction rate and a vastly improved cross-sell ratio. This, in part, contributed to the bank’s 14% increase in overall revenues.
“Citi offers a unique global network, insights and local market expertise to meet our clients’ banking needs. We have been serving our clients with distinction for the past 20 years of our presence in Algeria and our aspiration is to sustain our achievement and be the best at everything we do,” says Ramz Hamzaoui, chief executive of Citibank Algeria.
Angola, Banco de Fomento Angola
Since João Lourenço assumed the reins of power in Angola, becoming president in September 2017, the country’s reform programme has gathered pace. Fiscal consolidation has resumed and new laws to promote increased private investment have passed. Though the road ahead is likely to be long and difficult, the government is nevertheless considered to be on the right path.
For Angola’s banks, this bodes well. The winner of this year’s country award, Banco de Fomento Angola (BFA), emerged on top in a competitive category based on its technological innovation as well as the role it is playing in the country’s wider reform story.
In local currency terms net profits increased by 11.6% in 2017, while total assets were up by 9.9% and Tier 1 capital grew by 8.8%. Though BFA’s return on equity dipped to 35% from 38%, its cost-to-income ratio fell by an impressive margin – from 35% in 2016 to 24% in 2017. These strong results were accompanied by a number of organisational changes designed to reinforce its governance model over the review period. A number of new committees were created, including an assets and liabilities committee, which keeps track of BFA’s balance sheet, and an IT and innovation committee. These committees are comprised of board members as well as employees from relevant sectors of the bank.
BFA is also playing a pivotal role in supporting the development of Angola’s capital markets. In the first quarter of 2018 it executed 79% of all government debt trades – government securities are the only product traded on the debt and stock markets. The bank has also launched an asset management unit that is now one of the largest of its kind in the country.
Botswana, Stanbic Bank Botswana
It is hard not to be impressed by Stanbic Bank Botswana’s growth story. Between 2015 and 2017 the lender’s return on equity increased from 14% to 21%, as its cost-to-income ratio fell from 66% to 57%. An effective asset quality strategy has seen Stanbic Bank’s ratio of non-performing loans also fall over this period, from 6.4% to 4.4%. In local currency terms, the bank’s 2017 net profits surged by 24%, after growing by 48% in the previous year. Total assets and Tier 1 capital, meanwhile, grew by 2.7% and 4.4%.
Underscoring this growth is the bank’s approach to digital innovation. The launch of products such as eMarket Trade is a case in point. Billed as an advanced cross-asset electronic trading platform, eMarket Trader brings together market intelligence and research, real-time pricing, trade execution and post-trade services through a single web-based platform. As the platform runs through a standard web browser, no installation is necessary and clients are able to log in and use the offering as soon as they receive their security details.
Meanwhile, updates to the bank’s ATM network have improved the ways in which Stanbic Bank can reach and engage with its customers. Some ATMs have now been fitted with a rand-dispensing function, while most have been fitted with deposit-taking technology. The total ATM network increased in size to 48 by June 2018, up from 31 in December 2016.
“[The bank’s success] comes down primarily to the passion of our people, who are consistently delighting our clients and fulfilling aspirations in this great country we call home. We feel emboldened to do more for our people, clients and communities,” says Samuel Minta, chief executive of Stanbic Bank Botswana.
Burkina Faso, Orabank Burkina Faso
This is the second year in a row in which Orabank Burkina Faso has won the country award. Backed by stellar financial results, a focus on digital banking and a strengthening of the customer experience, it is little surprise that it emerged as the clear winner in 2018.
Product offerings such as OraMoney, an integrated solution for secure payments, have helped the bank’s major customers, which include the national electricity and water companies, to speed up their bill payments processes through the use of electronic payment terminals. This technology is deployed in house by the utility companies, as well as at Orabank locations across the country and by more than 200 authorised Orabank agents.
Orabank Burkina Faso also impressed the judges with its sustainable use of natural resources and an energy finance (Sunref) programme, in partnership with the French Development Agency. Through the programme, Orabank can supports its clients across the West African Monetary Union when their projects are geared towards energy efficiency, sustainable development or renewable energy. In turn, this has allowed the bank to capture greater market share in key industries.
Meanwhile, the bank’s financial performance went from strength to strength over the 2017 review period. Net profits increased by 22%, while total assets jumped by 34%. Tier 1 capital grew by 32.8%. These results went hand in hand with a strong return on equity, which reached 23.8%, and a cost-to-income ratio of 61%.
“Burkina Faso is a fast-growing and very competitive market with a very dynamic private sector. We are particularly proud to have won this award twice in a row,” says Martial Goeh-Akue, chief executive of Orabank Burkina Faso.
Cameroon, Société Générale Cameroon
Cameroon’s economy is on the up. After posting growth of 3.2% in 2017, the International Monetary Fund (IMF) expects an uptick closer to 4% by the end of 2018. This improvement is emerging off the back of new natural gas production and the infrastructure spending around the 2019 Africa Cup of Nations, according to research from the IMF.
Over the medium term, growth is expected to reach close to 5% as the momentum from these trends, and others, begins to accelerate. Cumulatively, this points to a healthy outlook for the country’s banks.
The winner of this year’s country award, Société Générale Cameroon, is no exception. The lender has, for instance, enjoyed consistently strong growth in recent years and this trajectory shows little sign of slowing. Net profits grew by 23% in 2017, which followed a 12.6% growth in 2016 and a massive 80% rise in 2015. Total assets, meanwhile, rose by 15% in 2017, as Tier 1 capital posted a marginal gain of 0.32%. This growth story is reflected in the bank’s improving return on equity. In 2015 it stood at 12% and has since improved to reach 15% in 2017.
In June 2018, Société Générale Cameroon launched its mobile banking application, known as ‘Connect’. This offering boasts several notable features, allowing the bank’s customers to conduct transfers, check their balance, pay bills and purchase additional phone credit, among many other services. Available both on Apple’s Appstore and Google Play, its features will permit customers to manage their domestic and international accounts more easily. In launching this product, customers have now been granted 24/7 access to their bank accounts in a secure and easy-to-use format.
Cape Verde, Banco Interatlântico
Banco Interatlântico scooped this year’s Cape Verde country award based on its strong financial performance, as well as the introduction of innovative new technologies and product offerings. The bank’s net profits increased by a staggering 354% in 2017, a performance that the lender attributes to its new strategic priorities. It has, for example, targeted the prevention of overdue credit, which has decreased by 25% since 2014. The lender has also increased the number of new loans issued while, between December 2016 and May 2018, lowering its average cost of funds from 2.8% to 0.98%.
As a result of these measures, and others, Banco Interatlântico’s return on equity has increased considerably over the past three years. In 2015 the figure stood at 0.29%. By 2017 this number had jumped to more than 3%. Its cost-to-income ratio has also moved in the right direction. In 2015 this figure was 85.1% but by 2017 it had fallen to 66.9%.
Meanwhile, in June 2017 the bank completed the migration of its core banking platform to a new system. This feat has ensured that Banco Interatlântico now operates a modern core banking system that will improve the scope of products the lender can offer to its customers. In addition to this, the lender also implemented the Fatca framework to ensure it is fully compliant with international requirements.
“[The bank’s success comes down to the] solid commitment of the staff, strong social responsibilities and sustainability policies, innovation and personal relationships. Our motto – Distinga-se! (Distinguish yourself) – intends to represent that every customer is the customer, not just another one,” says Pedro Gomes Soares, chief executive of Banco Interatlântico.
Côte d’Ivoire, Société Ivoirienne de Banque
Few economies in Africa can boast the kind of growth trajectory enjoyed by Côte d’Ivoire. In 2017 it expanded by about 7.6%, a performance that was in part attributable to improved agricultural output. Growth rates for 2018 and 2019 are expected to be similar, at about 7%, according to the World Bank.
This is occurring as the government enacts a number of market-friendly reforms, executes prudent fiscal policies and accelerates efforts to enact public-private partnerships. For the country’s banking sector, the future looks particularly bright.
Nevertheless, serious short-term challenges do exist. For one, the country’s lenders are overexposed to a small number of large borrowers and diversifying their customer base will take time in a country where only about 15% of the population has a bank account. But the winner of the 2018 country award, Société Ivoirienne de Banque, is making efforts to reach out to new customers through diversified products and services. It has also significantly strengthened its Tier 1 capital position in recent years. These reasons, combined with a strong financial performance, ensured that it came out on top in a competitive country category.
Net profits increased by 31% in 2017, while total assets grew by 10%. Against this backdrop, Tier 1 capital increased by 46% over the period. Meanwhile, the lender’s return on equity reached a healthy 37.4% while its cost-to-income ratio came in at 48.4%.
Underscoring this performance was Société Ivoirienne de Banque’s upgrade of its innovative mobile app, known as Sibnet. Customers using Sibnet can execute a wide of range of transactions safely and securely, while also keeping up to date, in real time, on flows in and out of their accounts.
"First of all, our strong ambition to enhance the market's offer leads to permanent innovation, thanks to the expertise of our fully involved human resources and Attijariwafa bank group's support. Our Ivorian DNA drives our commitment to the country's growth and offers a deep understanding of customers' needs which enables us to customise our solutions. Last but not least, the demanding standards of risk management and the quality of governance that we have settled strengthens our business model," notes Daouda Coulibaly, chief executive officer of Société Ivoirienne de Banque.
Democratic Republic of Congo, Trust Merchant Bank
Trust Merchant Bank (TMB) has been a strong contender in the Democratic Republic of Congo (DRC) country category over the years. In 2018, based on its solid growth numbers and continuing commitment to customer-focused innovation, it has scooped the top spot. The bank’s return on equity in 2017 was 10.1%, while its cost-to-income ratio stood at 70.9%. Non-performing loans (NPLs), meanwhile, were relatively high at 11.9%.
But the bank strictly adheres to the central bank’s NPL definitions, which class any loan that is overdue by one day onwards as non-performing. This, accompanied by the late payment of salaries over the review period impacting salary-loan instalments, accounts to a large extent for this figure.
Meanwhile, in mid-2018 TMB reached an agreement with South Africa’s Standard Bank to partner in the provision of banking services to its corporate clients in the DRC. In addition, Standard Bank made the decision to withdraw from the retail and business banking segments of the market and appointed TMB as its preferred provider of these services to its legacy customers. For its part, TMB has gained considerably from this arrangement. For one, it has acquired a wide array of new clients at no extra cost.
As a retail- and small and medium-sized enterprise-focused lender, it has also diversified its customer base by branching out, to a greater extent, to serve corporates. Looking ahead, TMB expects to provide Standard Bank corporate clients with on-site or near-site low-cost branches, which in turn will extend the bank’s presence to new areas of the country.
“[TMB’s success is down to] our relentless drive to innovate, our single-minded focus on relationship banking, and our unique private sector approach to financial inclusion that not only empowers some of the most disadvantaged, but also contributes to the bank’s financial strength,” says Oliver Meisenberg, chief executive of TMB.
Exim Bank Djibouti impressed the judging panel for a number of reasons. A stellar financial performance, which saw strong growth across all key indicators, has gone hand in hand with the development of customer-centric services and products. These include the build of a digital payments platform for the Djibouti Port Community System (DPCS), which is a single-window online service delivery for the port authority, terminal operators, shipping lines and government entities.
Exim Bank’s payments platform augments this system by digitising all payments at source, providing real-time confirmation to the DPCS and offering streamlined reconciliation for all payments received. The outcome of this digital payments platform is that it unites more than 10 shipping lines, 18 government entities, more than 50 corporates and over 200 freight, logistics and forwarding agents under one payments window.
The lender has also developed an electronic collections platform for Djibouti’s national electricity board. This system automates utility bill collections with the reconciliation of customer payments occurring against invoice numbers. The offering has the added advantage of validating and processing different business rules including late and partial payments. Looking ahead, the system is both scalable and replicable, meaning that it could be applied to other public and private sector clients.
Beyond these initiatives, the bank also posted exceptional growth numbers. In 2017, Tier 1 capital surged by 47.7%, while total assets and net profits increased by 22% and 11.9%, respectively. Exim Bank’s return on equity hit 30.4% over the period, and its cost-to-income ratio moved to 55.5%, down from the 58.1% posted in 2016. Gross non-performing loans stood at 0.8%.
Banque Misr has been awarded the Egypt country award in 2018 based on its impressive multi-year growth story and its commitment to financial inclusion and the financing of small and medium-sized enterprises (SMEs). The judging panel were particularly impressed with the ways in which the bank has harnessed technology and innovation to meet these goals.
“Founded with the mission to substantially contribute to the welfare and prosperity of Egypt, Banque Misr continues to adhere to its mission steadfastly, through an unwavering commitment to the interests and demands of the Egyptian masses, whose welfare has always been at the very core of our operation,” says Mohamed Mahmoud Ahmed Eletreby, chairman of Banque Misr.
The lender has implemented a modern, end-to-end automated SME workflow system to improve the way it engages with this business segment. As a result, the solution has automated the workflow linked to SME loans, including the review, study and approval phases, among numerous other improvements. It took Banque Misr only four months to introduce this new system. Meanwhile, the bank is also playing a central role in Egypt’s financial inclusion drive. This includes financial literacy and education programmes, as well as the distribution of publications and the delivery of lectures.
In 2016/17 financial year the bank’s net profits reached 48%, while total assets grew by 83% in local currency terms. Banque Misr’s return on equity over this period was 16%, while its cost-to-income ratio was 32.2%.
“We do not simply strive only for financial profitability, but also to serve as a catalyst to national and strategic development, underlining our commitment to sustainability and continuous development,” says Mr Eletreby.
Equatorial Guinea, Banco Nacional de Guinea Ecuatorial
Banco Nacional de Guinea Ecuatorial (BNG) may be a relatively small lender but it is one with big ambitions. In the face of severe domestic headwinds – Equatorial Guinea’s gross domestic product has witnessed a cumulative decline of 25% since 2014, according to the International Monetary Fund – BNG is now looking further afield to diversify its growth opportunities.
One notable step forward in this regard was the opening of an overseas representative office in January 2017. But having received regulatory authority from the Central African Banking Commission to change the status of its activities in Spain to fully and commercially operative in nature, the lender is now preparing for the second phase of its plan to grow in Spain. This includes opening retail branches in areas of Madrid other than where it is already present, as well as in Barcelona, Valencia, Bilbao or Zaragoza. BNG has determined that these locations have the highest percentage of people and businesses with ties to either Equatorial Guinea or the constituent states of the Economic and Monetary Community of Central Africa.
Meanwhile, BNG is in the process of creating a subsidiary unit in Cameroon. All relevant regulatory approvals have been granted and the new subsidiary will have its head office based in the country’s commercial capital of Douala. Further afield, the bank is also looking into the development of a representative office in China.
“The success of Banco Nacional de Guinea Ecuatorial is based on the training of our staff, our relations with main finance actors, a focus on compliance, strong presence in events and the domestic expansion and engagement within the Guinean society,” says Manuel Osa Nsue, chief executive of the Banco Nacional de Guinea Ecuatorial.
Nedbank Swaziland secured the top spot in the Eswatini (formerly known as Swaziland) country category based on the array of new products and services it has introduced over the past 18 months, as well as its strong financial performance. The bank’s net profits grew by 9% in local currency terms in 2017, while total assets and Tier 1 capital increased by 19% and 22.2%, respectively. By the end of 2017, the lender’s return on equity was strong, at 15%, while its cost-to-income ratio was 57%. Non-performing loans were an impressive 0.75%.
The upgrade of Nedbank Swaziland’s mobile banking application has been a notable success for the lender in recent times. For its customers, the enhanced offerings on the app have delivered benefits including utilities payments and airtime and data purchases. It also allows third-party payments to bank- or customer-designated beneficiaries. The mobile app is now bundled with new customer accounts with an emphasis on the bank’s student account offering. To this end, Nedbank has also positioned staff at local tertiary institutions during the start of the academic year to capture a larger market share of young people across the country.
Meanwhile, Nedbank has also implemented an electronic filing system. This system eliminated the need for the physical filing of documents, which in turn has prevented the loss of data through misfiling while cutting back on the physical storage space needed to house paper-based information. As a result of this investment, document retrieval has been cut from 12 hours to real time, while the additional space generated through the loss of filing cabinets has freed up room for the bank to accommodate additional working space.
Gabon, United Bank for Africa Gabon
United Bank for Africa Gabon (UBA Gabon) has combined a commitment to financial inclusion with a strong financial performance to secure the winning position for the Bank of the Year award for Gabon in 2018. For the past three years the bank’s net profits have increased at rate of more than 50%, while total assets grew by 14% in 2017 and 19% in 2016. At the end of 2017, the lender’s return on equity was a sky-high 54%, while its cost-to-income ratio had fallen to 60%, from 73% in 2016. These strong numbers were generated despite a faltering economy, which expanded by just 0.6% in 2017.
One of UBA Gabon’s key successes has been the introduction of mobile banking into the market. The USSD code of *919# permits clients to perform a range of tasks, from opening an account, to transferring funds to viewing mini-statements and paying bills. Fast and convenient, this product does not require mobile data and therefore meets the bank’s objectives of serving the unbanked and enhancing financial inclusion through technology.
The bank is also addressing financial inclusion through other means. The introduction of an agency banking network, for example, has helped microfinance institutions provide access to finance for small and medium-sized enterprises and the underserved and unbanked segments of the population across the country.
Meanwhile, the roll out of pre-paid card solutions for customers without bank accounts has also been a big success for the bank. This product is used by the general public as a secure way to store their funds, as well as by government entities and corporates to pay salaries and manage their expenses.
Gambia’s tourism- and agriculture-dependent economy ticked along at a respectable pace in 2017, expanding by 3.5%. Lower interest rates played a part here, as did stronger growth in the country’s services sector, according to research from the World Bank.
Nevertheless, the economy faces a number of challenges, including high debt levels as well as its undiversified structure. The country’s banks are playing a role in tackling some of these challenges as efforts to improve the ease of doing business and encourage financial inclusion become more urgent. The winner of this year’s country award, Ecobank Gambia, impressed the judging panel for these reasons and more.
The bank’s net profits increased by 22% in 2017, while total assets rose by 1% and Tier 1 capital jumped by 8%. This performance was accompanied by encouraging performance indicators in other areas. The lender’s return on equity, for instance, expanded to 25% in 2017, from 22% in the previous year. Over the same period, its cost-to-income ratio fell to 52%, from 58%. Non-performing loans, meanwhile, almost halved from 1.5% to 0.8%.
In September 2017, Ecobank launched Ecobank Scan+Pay in partnership with Visa. This offering provides a quick, secure and cashless payment mechanism for goods and services to the bank’s customers. By scanning a QR code on a smartphone or entering a unique merchant identifying code on feature phone, the payment moves straight from the customer’s account to that of the merchant. Both parties then receive real-time notification of the payment. This offering is accelerating digital commerce in the country and tackling the challenges that merchants face with traditional point-of-sale systems.
Zenith Bank was the outstanding entry in a highly competitive Ghana country category. The judging panel were impressed by the lender’s strong, multi-year growth story, its commitment to technological upgrades and innovative service offerings, and its enviable capital and liquidity positions.
In 2017, the bank’s net profits, in local currency terms, increased by 24%. Total assets and Tier 1 capital rose by 37% and 30%, respectively. Against this strong 2017 performance, Zenith Bank’s return on equity reached 38% while its cost-to-income ratio was a respectable 39%.
Following the Bank of Ghana’s September 2017 directive for all lenders to raise their minimum capital from 120m cedis ($24.5m) to 400m cedis by December 2018, Zenith Bank moved quickly to address this requirement and assume a leading position in the market. The new capital level was met by the bank in February 2018, more than 10 months ahead of the regulatory deadline. The pace of this move shored up confidence in Zenith Bank, at a time when a number of other lenders are struggling to meet the requirement.
Meanwhile, Zenith Bank has upgraded its core banking system to improve its service delivery as well as to drive internal efficiencies. Among other benefits, this upgrade has permitted enhanced foreign exchange dealing functionality and the ability to automate fixed-income deals in bond operations. It has also upgraded the lender’s interface with the Ghana Interbank Payments and Settlement System and now allows the transfer of mobile money from e-wallets across different networks.
“Zenith Bank has built a strong corporate culture around its people and service delivery, where everyone has an internal aspiration to be competitive at all times,” says Henry Oroh, chief executive of Zenith Bank Ghana.
Kenya’s Equity Bank continues to go from strength to strength. The lender saw its net profits increase by 14%, in local currency terms in 2017. And there has been little sign of this slowing down in 2018 – in the first quarter of the year, profits after tax were up by 22%. Total assets and Tier 1 capital in 2017 increased by 11% and 16%, respectively. Equity Bank’s return on equity at the end of 2017 was a healthy 21.6%, and its cost-to-income ratio was 53.5%.
These results, in part, reflect the bank’s recent emphasis and strategic focus on eight key growth drivers. These include non-funded income growth, covering various bank charges and transaction fees. With more than 96% of transactions occurring outside bank branches, Equity Bank is capitalising on this trend to provide better services for its customers while ensuring the sustainability of this income line. Non-funded income for 2017 stood at Ks16.5bn ($160m), amounting to about 41% of total income.
In addition, a cap on commercial interest rates in Kenya has led Equity Bank to scale up its regional operations and non-banking business. As a result, regional subsidiary contributions to the wider group performance have increased from 14% to 19%. On the digital front, Equity Bank rolled out its digital banking proposition, Eazzy Banking, which includes online and mobile banking, to Uganda, Rwanda and Tanzania in 2017.
The bank’s strong growth has been accompanied by improving asset quality. Its ratio of non-performing loans stood at 6.3% in 2017 against a country average of 12%. Better credit risk management, as well as customer relationship management, are the source of this market-beating position, according to the bank.
For a country beset by challenging security conditions, Mali’s economy is doing well. Growth reached 5.3% in 2017 and has averaged 6.3% since 2013, according to research from the International Monetary Fund. In recent times, good harvests and strong domestic demand have underpinned this growth. But challenges do remain, particularly for the country’s banking sector.
For one, although banks’ capitalisation has increased, there remains a persistently high degree of non-performing loans in the wider system. As of December 2017, this stood at 16.7%. In addition, most of the country’s lenders suffer from high degrees of loan concentration with little opportunity to diversify in a relatively small economy.
These difficulties aside, for now, Mali’s banks are performing strongly. The winner of this year’s country award is Ecobank Mali, which stood out for its efforts to promote digital financial services across the country. Indeed, the spread of mobile banking across the country is one of the biggest stories to emerge from Mali’s financial sector in recent times.
Ecobank Mobile, the lender’s major investment in digital banking, falls under this umbrella. Through this offering, customers are granted full access to their accounts and associated services, including transfers, payments and mobile phone top-ups, among others. Users of Ecobank Mobile can also pay merchants at key retail outlets, such as supermarkets, pharmacies and restaurants, quickly and securely through this service.
Beyond digital financial services, Ecobank Mali has also posted strong growth figures. The bank’s return on equity at the end of 2017 was 31%, while its cost-to-income ratio was 66%. Importantly, the lender’s Tier 1 capital also received a boost to the tune of 20%.
In the highly competitive Mauritius country category, SBM Holdings emerged as the clear winner. The judging panel reached this decision on the basis of the group’s inroads into its five-year growth strategy, which includes progress in terms of its regional footprint, as well as advances in digital finance and technological innovation.
Beyond this, the group also posted exceptionally strong numbers. Net profits grew by 11.5% in 2017, while total assets and Tier 1 capital increased by 32.1% and 7.6%, respectively. In addition, its return on equity reached 10.5% by the end of 2017, as the cost-to-income ratio came in at 44.7%, while gross non-performing loans to gross advances were 4.47%.
In 2016, the group launched a new five-year strategy aimed at doubling its assets from their 2015 size by 2020, while maintaining a top-tier return on equity. To get there, the group has focused on regional and international growth. This includes the acquisition of Fidelity Commercial Bank in Kenya in May 2017, and initiating the acquisition of the carved out assets of Kenya’s Chase Bank, which will help the group to build scale in the country.
In addition, in 2017 the group’s Indian unit was awarded a wholly owned subsidiary licence by the Reserve Bank of India, becoming the first foreign lender to achieve such a status. These events, and others, will help the bank achieve its vision of tapping into the Africa-Asia trade and investment corridor.
“In addition to our great Mauritian franchise, we successfully expanded into the Kenyan market, and are on the verge of establishing a wholly owned subsidiary in India. Through our entities in Mauritius, India, Kenya and Madagascar we are building a stronger and more diversified group,” says Andrew Bainbridge, group chief executive of SBM Holdings.
Morocco, Société Générale Maroc
Morocco’s economy expanded by more than 4% in 2017 after strong rainfall contributed to better than expected agricultural output. This momentum is expected to slow somewhat over the coming years, with most estimates indicating that gross domestic product growth will hover around the 3% mark over 2018 and 2019.
Faster growth will be needed in an economy that is grappling with high levels of unemployment. To this end, the government is investing in infrastructure and enacting a number of much-needed economic reforms. And the country’s banks, which are well capitalised and secure, are playing their part by opening up new avenues of financing to support the country’s growth.
The winner of the 2018 Morocco country award, Société Générale Maroc, is no exception. In 2017 the bank successfully launched its Islamic window, Dar Al Amane, in the wake of the central bank’s approval of Islamic lending in the country. Dar Al Amane will operate from a network of agencies across Morocco and is already operating out of eight locations in the country’s largest cities. The bank is aiming to increase this number to 20 over the next few years.
Meanwhile, the bank enjoyed strong growth over the 2017 review period. Net profits increased by 14%, while total assets jumped by 5% and Tier 1 capital grew by 6%. The lender’s return on equity at the end of 2017 was 9%, while its cost-to-income ratio was 50%.
“The bank’s success stems from our ability to provide the close human relationship and strong market understanding of a Moroccan bank combined with the international standards of transparency, confidentiality and expertise ,as well as a wide network in Africa and beyond,” says François Marchal, chief executive at Société Générale Maroc.
In recent years, Banco Único has emerged as one of the most exciting growth stories in Mozambique’s financial sector. Despite facing some challenging headwinds in the domestic economy, the lender has married digital innovation with customer service excellence to become one of the leading financial institutions in the country.
By the end of 2017, Banco Único’s return on equity was 18.5%, while its cost-to-income ratio was 51%. And, despite a very challenging macroeconomic environment, its ratio of non-performing loans was just 3.6%, against a country average of 12%.
Meanwhile, Banco Único has been working hard on its suite of digital banking propositions. In November 2017 the lender launched its mobile banking application designed specifically for companies. Less than a month after its launch, the app had achieved a penetration rate of 7% among the bank’s customer base. In addition, in June 2018, Banco Único also launched its innovative social banking app, called Único SocialApp. This offering, which is a first of its kind for Mozambique, allows customers to create a social banking network through their smartphones and ultimately to facilitate peer-to-peer lending.
“Treating each customer as unique, with sympathy, total availability and proximity, and responding to their needs with rigour, quality and [speed], is the attitude that the entire team of Banco Único has in its DNA. In fact, it is precisely this secret element that has taken us along the right and consistent path that the Mozambican market recognises today,” says António Correia, chief executive of Banco Único.
Namibia, Standard Bank Namibia
Standard Bank Namibia has enjoyed a sustained period of growth in recent years. Strong performance indicators, coupled with an impressive suite of strategic initiatives and product and service innovations, ensured that it scooped the Namibia country award this year.
Net profits were up by 1.2% in 2017, while total assets and Tier 1 capital expanded by 13.6% and 11%, respectively. More encouragingly, the bank’s return on equity was high, at 18.56%, while its cost-to-income ratio came in at 59.82%. Non-performing loans, meanwhile, were exceptionally low at just 0.49%.
Beyond the figures, Standard Bank Namibia also impressed the judges with its Tuyende Series, which is a three-day leadership engagement programme for its staff. This programme is tailored to prepare the bank’s team for changes to the business, while also encouraging individuals to think creatively and to innovate in order to take each area of the business to the next level. To date, 14 sessions have been conducted with more than 1000 employees from across all levels of the organisation.
In terms of its approach to technology, Standard Bank Namibia is presently focused on a number of ‘signature projects’. These include the Namibia Customer Migration project, which is seeing the migration of remaining corporate and business banking customers off South Africa-based legacy systems to local Namibian systems.
The bank is also working to expand its Business Online offering, which provides corporate and business banking clients with 24/7 access to services, including trade and investor offerings across countries and currencies, through an online portal. About 25% of the bank’s corporate and business customer base are currently using the service.
Guaranty Trust Bank (GTBank) has, once again, emerged as the country winner for Nigeria. The judges reached this decision based on the bank’s peerless commitment to technological innovation, as well as a set of impressive performance indicators.
Taking this award for the second year in a row is testament to the kind of long-term thinking that lies behind GTBank’s development. This can be seen in the improvement to its pre-tax return on equity (ROE) over the past three years. It ended 2015 with an ROE of 29.5% but by the end of 2017 this figure had climbed to 35%. Similarly, the bank’s cost-to-income ratio has fallen over this horizon from 41% in 2015 to 33% in 2017.
Sitting alongside these figures, the bank’s 2017 financial performance was equally impressive. Net profits increased by 27.2% as total assets and Tier 1 capital climbed by 8.1% and 13.4%, respectively.
These results were accompanied by the bank’s signature investments in its technology, with the 2017 launch of a new data centre being a case in point. This state-of-the-art facility, which runs on 10G network capacity, will vastly improve the bank’s operational and processing capacities. It is also powered by a sub-station and three standby generators, meaning that it drastically reduces the scope of data being lost through power outages or system shutdowns. But the data centre will primarily drive product and service design and help the bank to push forward with its goal of driving the future of digital banking in Africa.
Meanwhile, the launch of new products such as the GTPatriot Account also caught the judges’ attention. Designed for those serving in the Nigerian armed forces, the account offers a unique salary account package with a number of benefits, including no minimum opening balance.
Republic of Congo, United Bank for Africa Congo
Despite its new oil field, Moho Nord, coming on stream in 2017 and an accompanying increase in oil prices, the Republic of Congo’s economy has suffered in recent times. An economic contraction of -2.8% in 2016 deteriorated further in 2017 with the economy shrinking by -4.6%.
Spiralling government arrears have hit the non-oil economy hard, with the telecommunications, construction and transport sectors particularly affected. This situation led to a -9.2% contraction in the non-oil economy in 2017, leading many companies to reduce their activities and staff levels in the country, according to the World Bank.
Banking in an environment of this type is clearly difficult but the winner of this year’s country award, United Bank for Africa Congo (UBA Congo), is turning to innovation to secure its future growth. After posting strong growth numbers across all metrics, including Tier 1 capital, net profits and total assets over 2015 and 2016, the lender saw net profits and assets dip in 2017. Tier 1 capital, meanwhile, continued to increase by 12.7%. Nevertheless, the bank’s return on equity remained healthy at 31% and its cost-to-income ratio fell to 50%, from 54% in 2016.
Meanwhile, UBA Congo’s commitment to service innovation has seen the launch of its ‘chat banker’, Leo. This service is offered through customers’ social media accounts – specifically Facebook Messenger – and enables them to transfer funds, open new accounts, pay bills, apply for loans and top up their mobile air time, among many other offerings, through this social media function. The bank is planning to extend its Leo service to other social media platforms in the future. In terms of security, Leo generates a one-time password that is sent to the phone number registered with the account.
Building on its success from the 2017 awards, the Bank of Kigali has once again taken the top spot in the Rwanda country category. The judges were impressed with the bank’s strong set of performance metrics, as well as its ongoing drive to offer digital products and services.
In 2017, the lender’s net profits expanded by more than 12%, while total and assets and Tier 1 capital grew by over 13% and 15%, respectively. Bank of Kigali’s return on equity remained steady, at a strong 20%, while its cost-to-income ratio fell by a decent margin, from 47.4% in 2016 to 45.2% in 2017. Meanwhile, non-performing loans registered a marginal increase, rising from 4.5% to 5.6% over the review period.
Over the past 18 months, the Bank of Kigali has launched a number of digital service offerings. These include the BK Mobile application, available on Apple and Android (the lender also offers USSD banking on feature phones) and BK online banking. Both offerings allow customers to pay bills, transfer funds and check their balances at their convenience. Bank of Kigali has also launched its ‘Quick Loan’ service that offers an easily accessible loan with a repayment time frame of six months. No forms are required to secure this loan and if a customer repays the facility inside the time limit they can generate higher loan limits in the future.
In tandem with its digital offerings, the Bank of Kigali has also expanded its physical footprint. Its network of branches today stands at 71 locations, while it also boasts 91 ATMs and a network of 1437 agents across the country.
Orabank has only been present in Senegal for the past four years but in that time the lender has made quite a splash. While its growth numbers – which are high – partly reflect the lower base from which it is starting, it has also demonstrated the kind of innovation and ingenuity required to challenge more established institutions in a competitive landscape.
This approach has led to the development of market-leading products, including the Executive Package, which is a bundle of offerings designed for senior executives at the country’s largest corporate groups. This package is tailored to their lifestyle needs and, for example, includes credit offerings at attractive rates, automatic overdrafts and a subscription of other services linked to their bank accounts. In this way, Orabank has been effective at making inroads into the Senegalese corporate sector.
In addition, Orabank has invested in and deployed ‘smart safes’ (safe deposit boxes) to its key clients, including Senegal’s largest utility company. The bank’s smart safes provide real-time deposit and efficient cash processing and are capable of accepting up to 500 notes at a time. They can process 600 notes per minute and are able to store a total of 10,000 bank notes.
In terms of the bank’s financial performance, Orabank ended 2017 with a return on equity of 23.9%. Its cost-to-income ratio was 67%, down from 80% in 2016, while non-performing loans were 2.66%. Net profits, Tier 1 capital and total assets all surged by double or triple figures.
“As a relative newcomer to the fiercely competitive Senegalese market, we are enthused by this award. We will sustain our strategy to win market share through innovative products and outstanding service,” says Luc Morio, chief executive of Orabank Senegal.
Sierra Leone, Guaranty Trust Bank
Guaranty Trust Bank (GTBank) could have secured this year’s country award for Sierra Leone on the basis of its financial performance alone. The lender’s net profits increased by 22.5% in 2017, while its total assets and Tier 1 capital expanded by 14% and 39%, respectively. This was achieved as its return on equity at the end of 2017 reached 39.8%, its cost-to-income ratio was 44.9% and non-performing loan ratio was 1.6%.
But beyond these numbers, the bank has also pursued a number of strategic initiatives and technological innovations that have shaped the market in profound ways.
The signing of a foreign currency swap deal with the Bank of Sierra Leone is a case in point. As banks in Sierra Leone are forbidden from lending in foreign currency, their balance sheets can be inefficient and most are awash with liquidity. In response to this situation, GTBank Sierra Leone entered into a swap contract to the tune of $8m with the central bank and invested this figure in treasury bills for a nine-month period.
In return, the bank generated more than $1m in income. In doing so it became the first bank to receive repayment of the principal investment as well as its accompanying yield from the central bank. A number of other lenders have now followed suit.
GTBank has also upgraded its hardware security module, which is responsible for the security of ATMs and point-of-sale credit and debit card transactions from payShield 8000 to payShield 9000.
“The success of the bank is attributable to the efficacy of its operations through cost-contained strategies and the acceptance of our various products that are tailored towards customers’ needs,” says Ade Adebiyi, managing director at Guaranty Trust Bank Sierra Leone.
South Africa’s recent economic performance has been disappointing. Growth in 2017 came in at 1.3%, according to the World Bank, and it is expected to marginally increase to 1.4% in 2018.
In light of the country’s population growth, gross domestic product per capita increases have not been sufficient to address issues around poverty and job creation. Even so, the country’s banks are playing their part in addressing challenges linked to financial inclusion and in doing so are helping to address some of these structural difficulties, while boosting the performance of the wider economy.
It is here that Standard Bank is playing a leading role with a number of its initiatives in this space. The success of its flagship Instant Money offering is a good example. Users of the Instant Money product can send and receive money using a basic feature phone. They are also not required to have a bank account.
In 2017, the bank expanded this offering from a person-to-person money transfer and bulk payments service to an e-wallet function, allowing users to store value on their phone and send and receive these funds to others. Users of the service can also buy high-volume items such as pre-paid electricity, mobile airtime and mobile data, as well as withdraw cash, without the need for a bank account.
Standard Bank currently processes about 1.7 million transactions per month on Instant Money. In 2017, approximately 6.5 million clients used Instant Money for more than 18.5 million transactions to the value of R13bn ($927m). The service is in use across six of Standard Bank’s markets, meaning that its financial inclusion-based benefits are spreading across the wider region, while about 78% of all users are not Standard Bank clients.
The challenges facing Sudan’s economy are stacking up. Though gross domestic product growth in 2017 was about 3.5% and US sanctions were lifted towards the end of the year, inflation has since spiked and a dearth of hard currency has distorted the economy in a number of ways. But, despite these difficulties, the winner of the 2018 country award, Omdurman National Bank, has managed to find positive growth momentum. In local currency terms, net profits in 2017 increased by 47% while total assets and Tier 1 capital were up by 82% and 32%, respectively.
Beyond these figures, the bank also registered an increase to its return on equity, which hit 32.8% at the end of 2017, up from 29.7%. The bank’s cost-to-income ratio also moved in the right direction, falling to 21.3% from 22.7%. Non-performing loans remained steady year on year at 3.94%.
Meanwhile, the launch of a new mobile banking application has ensured that Omdurman National Bank’s digital service offerings have continued to grow. The app permits customers to conduct banking transactions safely and securely from their mobile phones. Functions includes transfers and payments, as well as the ability to switch between multiple accounts, check account balances and to request cheque books.
Omdurman National Bank has also conducted a sweeping reorganisation of the business to enhance its operational efficiency and ensure it is ready to deal with a changing marketplace. To this end it has created a central operations department to streamline internal business practices, as well as a marketing department to promote the bank’s activities to an external audience. This was completed as the lender also unveiled a number of new branches across the country.
Tanzania, Standard Chartered Bank Tanzania
In 2017, Standard Chartered Bank Tanzania celebrated its centenary anniversary. In that time, the lender has come a long way and in 2018 it has been awarded the The Banker’s pick for Tanzania’s Bank of the Year. This decision was based partly on Standard Chartered’s excellent performance over the review period, but it also reflects the bank’s strategic focus on reigniting growth, as well as its investments in technology and innovation.
“Our success is hinged on an unwavering focus on our shareholders’ and clients’ interest and prosperity, built upon our strong foundation of ‘do the right thing’,” says Sanjay Rughani, chief executive of Standard Chartered Bank Tanzania.
The bank’s net profits expanded by 39% in local currency terms over the 2017 review period, while total assets and Tier 1 capital grew by 20% and 18%, respectively. At the same time, its return on equity climbed to 15% from 14% year on year, while its cost-to-income ratio fell to 54% from 61%. Standard Chartered’s ratio of non-performing loans at the end of 2017 was high, at 8.4%, but below the sector average of 9.53% (registered in December 2016).
Beyond the numbers, the bank has also been driving ahead with its digital innovation strategy. This includes the full automation of its electronic fund transfer payment system, which occurred in October 2017. By fully automating this function and linking it to the straight-through processing platform, the lender successfully removed any manual intervention that was previously required and in doing so improved the security, efficiency and accuracy of this process. Turnaround time has subsequently improved from up to 48 hours for end-to-end processing to less than 12 hours for every transaction.
Orabank Togo impressed the judging panel on a number of fronts. For one, the bank recorded an impressive set of financial results. In local currency terms, net profits increased by 37%, while total assets and Tier 1 capital increased by 0.9% and 23%, respectively. The bank’s return on equity also increased over the review period, rising to 28% in 2017 from 21% in 2016. Its cost-to-income ratio dropped in this time from 58% to 51%. This performance was achieved against a backdrop of slower economic growth: Togo’s economy expanded by about 4.4% in 2017 against 5.1% in 2016.
The bank’s strategic initiatives also caught the attention of the judges. The bank was approved as a specialist in the value of the treasury for Togo over the review period. This approval positions Orabank Togo as a privileged partner of the Togolese treasury, permitting the lender to promote the state’s public debt securities while being able to subscribe to at least 5% of transactions on the market at a predefined price.
Orabank Togo has also created its own trading room, in line with its ambition of becoming a reference point on the regional exchange market. From this location, the bank assists its institutional clients with currency hedging, their investment needs, their financing requirements with respect to international trade, as well as offering advice.
“As our home country, Togo is at the forefront of everything we do at Orabank. We will keep experimenting our most innovative solutions, from mobile banking to tailored products for small and medium-sized enterprises, so as to remain a very relevant player in the financial landscape,” says Guy-Martial Awona, chief executive of Orabank Togo.
Tunisia’s economy has faced a number of headwinds in recent times. Domestic political struggles have combined with the instability in neighbouring Libya to act as a drag on the country’s economic trajectory. In 2017 the economy expanded by 2%.
However, there are signs of a fragile turnaround. In the first two quarters of 2018, economic growth picked up to reach 2.5% and then 2.8%, according to the World Bank. Stronger figures in the agricultural sector, tourism and export-focused manufacturing industries have contributed to this better than expected performance. This performance needs to be sustained, however, if the country has any hope of responding to a growing unemployment crisis.
The banking sector is also playing an important role, and the winner of the Tunisia country award for 2018, Attijari Bank, stands out. The lender has, for instance, launched an initiative known as Quick Start, which offers a space for Tunisian startups to connect with key business clients. In this way, the bank has positioned itself as a key supporter of Tunisian business and entrepreneurship. Similarly, the bank’s Dar Al Moukawel initiative offers a platform for entrepreneurs and micro-businesses to learn more about the financial, legal and tax implications of running a business, as well as virtual and physical business coaching.
Attijari Bank’s net profits grew by 21% over 2017, while total assets and Tier 1 capital increased by 13% and 10%, respectively.
“In spite of the delicate financial environment, Attijari Bank achieved a substantial performance in 2018. We focused our efforts on customer proximity and digital transformation which led us to success,” says Hicham Seffa, chief executive of Attijari Bank Tunisia.
Ecobank Uganda enjoyed an outstanding year in 2017. In local currency terms, the bank’s net profits grew by 90%, while total assets and Tier 1 capital expanded by 39% and 28%, respectively. Encouragingly, non-performing loans more than halved over the same period and had reached 2.17% by the end of 2017, down from 5.5% in the previous year. This performance was achieved against a backdrop of solid if unspectacular economic growth relative to Uganda’s historical norms.
Beyond these numbers, the bank has also been working hard to implement its digitisation strategy. This included the launch of a mobile banking application in February 2017 which allows customers to pay bills, transfer funds, top up their air time at any time, among other offerings. Over a period of four months the bank was able to attract an additional 84,000 customers to its mobile app.
In addition to this, Ecobank Uganda launched its instant money offering, which permits customers and non-customers to easily transfer money via the bank’s ATM network. Both offerings are furthering the advance of financial inclusion in Uganda.
Meanwhile, the launch of Ecobank Uganda’s paperless Xpress account, as a know-your-customer-lite offering that only requires a national identity card, is also fostering financial inclusion. In partnership with two telecommunications companies (MTN and Airtel), the bank has successfully facilitated the development of mobile wallets for both customers and non-customers. The end result has been a quick take up of this offering by both corporate and consumer customers alike. On the retail side, this has been executed in tandem with an agency banking model, ensuring that customers can cash in and out with their mobile money across the country.
In the highly competitive Zambia country category, Stanbic Bank has emerged victorious. The judging panel reached this decision based on the lender’s outstanding financial performance, as well as its industry-shaping strategic initiatives.
The bank’s net profits grew by 27% in local currency terms in 2017, while total assets and Tier 1 capital increased by a respective 12% and 25% over the same period. Stanbic Bank’s return on equity was also impressive, coming in at 20.6% by the end of 2017. At the same time, its cost-to-income ratio was 62.8% and non-performing loans were at 5.2%.
In May 2018, Stanbic Bank became the first lender in the country to be granted an insurance brokers licence from the Pensions and Insurance Authority. As a result, the bank can now distribute a wide range of competitive insurance products from multiple underwriters. It also fits with the lender’s broader bancassurance strategy as part of its goal to meet its clients’ broader financial services needs.
Meanwhile, in May 2017, the lender launched its Anakazi banking offering, which is a tailored women’s banking programme. This is designed to support financial inclusion for women in Zambia while also providing backing to female entrepreneurs in the country. About 40% of women in Zambia are classed as entrepreneurs, while only 33% of all women are formally financially included, according to the bank.
“The bank’s success is all about people and having the right culture that is determined to win, the right skills, [and placing] our customers at the nucleus of everything we do at Stanbic Bank. We have always focused on these ingredients and will continue to do so,” says Leina Gabaraane, chief executive of Stanbic Bank Zambia.
Zimbabwe is a difficult place in which to bank. For one, the country’s economic growth has been subdued and is showing little sign of improvement. In 2017, gross domestic product growth hit 3.4%, in part due to a recovery in agricultural output, after just 0.6% growth in 2016. The World Bank estimates that the Zimbabwe’s economic growth trend is expected to remain about 2% lower than regional norms, and well below increases in the domestic population, leading to negative per capita income growth. For banks operating in the country, these dynamics present a serious challenge.
But the winner of the 2018 country award, Ecobank Zimbabwe, has managed to shrug off these challenges, and others, to post a stellar set of financial results coupled with a suite of innovations that caught the attention of the judges. Net profits in 2017, in US dollar terms, increased by 125%, while total assets and Tier 1 capital both expanded by 38%. Meanwhile, the bank’s return on equity soared over the review period, reaching 33%, up from 19% in 2016. Equally impressive was the lender’s falling cost-to-income ratio, which came down to 39% in 2017 from 47% in 2016. And, in a difficult economic climate, the bank’s ratio of non-performing loans remained relatively low at 2.45%, even if this was an increase on the 2016 level.
Meanwhile, Ecobank Zimbabwe is pushing ahead with the digital transformation of its business. It was the first lender in the country to introduce QR code scan-and-pay technology in 2017 with a particular focus on large businesses, small and medium-sized enterprises and even individuals looking to accept payments from customers. All customers using Ecobank’s mobile app have the ‘pay merchant’ functionality that activates the phone’s camera to scan a QR code to identify the merchant and service being provided.
