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Nigerian Banks Not Among Africa’s Top 5

Joy Onyemaechi

Nine Nigerian banks listed among among top 25 banks in Africa and none of the banks were ranked among the top five banks in Africa, Banker magazine announced in a statement Monday. The banks which are among the top 25 banks in Africa which also made the 1000 global banks include Zenith, Ecobank, First Bank, GTbank and Access Banks. Others are Diamond Bank, UBA, Fidelity and FCMB. However, none of the banks were ranked among the top five banks in Africa. A statement by the Banker magazine on Monday showed that Zenith bank placed first among Nigeria top banks in terms of tier 1 capital but 6th in Africa with a capital of $3.162 billion.

It was followed by Eco Transnational which is second in Nigeria and 7th in Africa with a capital base of $3.030 billion. First Bank ranked 3rd in Nigeria and 10th in Africa with a capital of $2.327 billion. GT Bank came 4th in Nigeria and 13th in Africa while Access Bank is 5th In Nigeria and 15th in Africa with a capital base of $1.398 billion. Diamond bank came 6th and 17th in Africa while Fidelity ranked 8th in Nigeria and 21st in Africa. FCMB on its part was the 9th bank from Nigeria to make the top 25 banks in Africa. Bankers report said “Nigeria’s banks endured a difficult close to 2014, as the significant slump in oil prices caused havoc with the country’s economy.

“Zenith Bank has held its position as the sixth largest bank in Africa and First Bank of Nigeria has risen from 424th to 371st on the global list. However, Nigeria’s Guaranty Trust Bank has dropped from 415th to 449th with its capital base decreasing from $1.95 billion to $1.78 billion. Access Bank, Fidelity Bank and United Bank for Africa have also slipped down the ranking though Diamond bank has joined the African top 25 at 579th in the global ranking.”

“The difficulties of the South African economy are reflected in its bank’s performances in 2015 Top 1000 ranking but elsewhere there is good news for Togo’s Ecobank and First Bank of Nigeria. It added that: “For South Africa’s banking sector the largest in Africa, 2014 passed in a similar vein to 2013. Both years were dominated by weak performance of the national economy and ensuing volatility of the rand. In 2013, the rand lost 13 per cent of its value against the dollar and though 2014 did not see another rapid depreciation, rand volatility remained high.

“Standard Bank remains Africa’s   largest bank though it has dropped from 116th to 123rd in the overall ranking and its Tier 1 capital has fallen slightly from $10.56 billion to $10.18 billion. Elsewhere, Togo based pan African Lender Ecobank has improved significantly on its 2013 performance climbing 90 places to 306th and increasing its capital adequacy. The world’s largest banks continue to lose ground to Chinese rivals according to the Banker’s latet ranking of Top 1000 rank.

This year, HSBC which has restructured significantly and increased its focus on Asia slipped from fifth place to ninth place. Citigroup which has also curbed its overseas presence fell from sixth to seventh place.” Chinese banks are powering ahead of most banks in the world in the ranking. China now has three banks in the top five places with Bank of China moving from seventh to fourth and China Construction Bank staying in second place. Agricultural Bank of China moved up from ninth place to sixth place. The top Chinese banks are also the world’s most profitable.

Combined profits from all Chinese banks in the ranking are almost double those of US rivals and 10 times bigger than those of UK banks. In 2008, both UK and US banks were more profitable than their Chinese counter parts. China’s ICBC has topped the ranking for the third year in a row and their aiming to have 10 per cent of its assets outside China in five years time although this is small compared to the global banks in their heydays. In most areas of the world, banks increased their profit. Suffering heavy losses in 2012 and 2013, eurozone banks have increased their profits by 123 per cent from a low base. African banks increased profit by 18 per cent, Latin American Banks by 17 per cent and Asian Banks by 7.5 per cent. Asian Banks accounted for more than half of total world profits. The worst performance was in Central and Eastern Europe where profits plummeted 69 per cent largely due to falls in the value of the Russian and Ukrainian currencies.

The best returns on capital are made in South America at 26 per Continued on Page 37 cent, followed by Africa at 24 per cent and Asia Pacific at 19 per cent. The Euro zone’s return on capital is the lowest in the world at just under 5 per cent. In 2014 thirteen banks made the list of the top 1000 banks in the world.

This number was cut down in the new report to just nine banks. The banks that did not make the list include Skye bank, Stanbic IBTC bank, Union Bank and Standard Chartered Bank of Nigeria. Most of the banks that made the list actually dropped in their ranking. Four out of five South African Banks have dropped in the top 1000 world banks ranking with a sixth, African, dropping out of the entire table. First Rand has held its Top Nigerian Banks and their Ranks regional ranking position to 216th and has seen its capital base drop to $4.76 billion from $5.11 billion. Barclays African Group, previously known as Absa Group would have come third in the African ranking with a Tier 1 capital base of $6.09 billion but is excluded from the main ranking as it is a subsidiary of the UK’s Barclays.

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