This year’s Top 100 African Banks rankings reveal that the continent is belatedly but determinedly following the global trend towards consolidation. The watchword is big is beautiful. South African banks, which are by far the largest in Africa both in terms of capital and assets, have been consolidating for years. Nigeria has just gone through a frenzied two-year period of mergers and acquisitions; when the dust had settled, only two dozen banks remained standing. More M&As are on the way as are partnerships with strong overseas financial institutions. With the price of oil remaining high and with that country’s non-oil sector showing growth for the first time in several years, Nigerians are anticipating an economic boom and the banks are bracing themselves to deliver. Our Cover Story therefore includes a detailed examination of the latest developments in Nigeria’s banking sector. As in previous years, we have included a region-by region overview. This special report was written by Moin Siddiqi and Neil Ford. The tables were compiled by Moin Siddiqi and Omar Ben Yedder.
African Business’ ranking for the Top 100 African Banks was based on shareholders’ funds (Tier 1 capital) as defined by the Switzerland-based Basel Bank for International Settlements (BIS). The African markets continue to present both opportunities and challenges for strategic investors and nowhere is this better reflected than in the area of the financial services industry. Economic growth in Africa is projected to exceed 5% this year and next, thus conditions are ripe for well-managed banks to perform strongly. Consolidation (as recently in Nigeria) is needed as a number of markets remain over-banked. The rationale for mergers and acquisitions is that larger banks can exploit economies of scale, reduce costs and provide their clients, both retail and corporate, with new and more efficient services – including internet banking and electronic payments.
African Business’ ranking for the Top 100 African Banks was based on shareholders’ funds (Tier 1 capital) as defined by the Switzerland-based Basel Bank for International Settlements (BIS). The African markets continue to present both opportunities and challenges for strategic investors and nowhere is this better reflected than in the area of the financial services industry. Economic growth in Africa is projected to exceed 5% this year and next, thus conditions are ripe for well-managed banks to perform strongly. Consolidation (as recently in Nigeria) is needed as a number of markets remain over-banked. The rationale for mergers and acquisitions is that larger banks can exploit economies of scale, reduce costs and provide their clients, both retail and corporate, with new and more efficient services – including internet banking and electronic payments.
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