Africa’s banks have never constituted a significant share of the Top 1000 ranking, but with about 15% of the world’s population, low levels of bank account penetration and vast natural resources, there should be no question over the continent's banking potential.
However, this scope for growth is not reflected in this year’s Top 1000 ranking, which featured just 30 African banks. The continent's institutions accounted for 0.72% of total assets and 1.01% of total Tier 1 capital from the overall Top 1000 World Banks ranking. Both figures are fractionally down from last year.
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South African banks continued to dominate the upper echelons of the African representatives in this year’s Top 1000 World Banks, holding four of the top five regional slots and accounting for four of the 10 highest movers.
Standard Bank is once again Africa’s top bank. The Johannesberg-based bank increased its Tier 1 capital to $12.06bn, an increase of 26.15% from last year, and a total almost twice as much as the second ranked FirstRand Bank Holdings’ $6.04bn. This was enough to place Standard Bank in at seventh in the regional highest movers table.
For the most part, Nigerian banks halted the dramatic fall through the regional and overall rankings noted in 2010, following the implementation of much-needed reforms by The Banker’s Central Bank Governor of the Year 2011, Lamido Sanusi. Nevertheless, the country’s financial institutions certainly did not exhibit dramatic growth. Some, such as Zenith Bank and Guaranty Trust Bank, boosted Tier 1 capital, but others, including Mr Sanusi’s former employer, First Bank of Nigeria, saw a decline.
None of the five new entrants made it into the African top 25, which showed little major movement. Notably absent was Libyan Foreign Bank, which was ranked ninth regionally in 2010 but did not submit data this year.
There are some positive signs, however. The average cost-to-income ratio among African banks was 49.70%, down from 61.87% last year, despite an average increase in operating costs of 19.11%, indicating a healthy increase in profits.
Two Kenyan banks entered the lower reaches of the Top 1000 this year; Kenya Commercial Bank, which was the second highest mover among African institutions, thanks to 87.11% Tier 1 capital growth, and Nairobi-based Equity Bank.
It was a mixed bag for the Egyptian banking sector, one of the African success stories of 2010. The country's institutions boosted their presence in the regional top 25 to five, but only National Bank of Egypt, Commercial International Bank and Banque Misr actually increased Tier 1 capital year on year. Arab African International Bank and Banque du Caire's Tier 1 actually fell.
