South Africa’s ‘big five’ lead The Banker’s Top 100 African banks listing while the impact of Nigeria’s new regulations on bank capitalisation has yet to filter through.

South African banks continue to dominate The Banker’s Top 100 sub-Saharan African banks listing with the ‘big five’ occupying the top five positions. In a change from last year, African Bank slips down to 10th from sixth place as the effects of the increased capitalisation of Nigerian banks to meet the new regulatory requirements start to be seen. Union Bank of Nigeria and Zenith International Bank both increased their capital by well in excess of 100% while First Bank of Nigeria and Intercontinental Bank had more modest increases of 34.1% and 50.5% respectively.

The full effects of the regulatory changes in Nigeria have yet to flow through into the listing because some banks have yet to report their latest full-year financials following the dash to increase capitalisation, either through the markets or through merger.

Rocky paths in Nigeria

For some of the banks that chose the latter course, especially where multiple banks were involved, the path has not been straightforward for either the banks or their customers. Customer expectation of being able to transact business in any of the banks of the merged entity have so far, according to local press reports, been frustrated.

For the banks involved, it cannot just be a pooling of resources to meet the regulatory requirements; the reality of integrating four or more banks of similar size into a unified whole requires both planning and investment to provide the systems necessary for success.

The aggregate Tier 1 capital for the Top 100 grew 19.1% to $27.9bn, while aggregate assets rose 13.3% to $416.7bn and aggregate pre-tax profit increased by 25.6% to $9.3bn. The South African banks’ share of the aggregate figures fell from 74.9% to 67.0% for Tier 1 capital, down from 83.5% to 80.8% for assets but up from 72.4% to 74.2% of aggregate pre-tax profits. The Nigerian banks’ share of aggregate Tier 1 capital increased from 11.3% to 20.0% from five fewer banks than last year, their share of aggregate assets rose to 8.4% from 5.9%, and their share of aggregate pre-tax profits was marginally up at 9.5% from 9.2% the previous year.

The third largest share of the aggregate Tier 1 capital, albeit reduced from last year, is that of the group of 41 banks from 20 countries grouped under ‘others’, which accounted for 5.9%, plus 5.2% of aggregate assets and 7.9% of aggregate pre-tax profit.

Foreign ownership

Thirty-one of the banks in the Top 100 are owned by banks from outside the region, led by the UK’s Barclays Bank and Standard Chartered, France’s Société Générale and BNP Paribas, and Banco Comercial Português. Barclays, with its acquisition of ABSA in 2005 and the seven other subsidiaries in the listing, now accounts for 14.9% of the aggregate capital of the Top 100, 16.4% of aggregate assets and 14.2% of aggregate pre-tax profits.

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