West Africa’s Top Banks: Another New Dawn For Nigeria

As ever, Nigerian companies dominate our survey of the Top 25 banks in West and Central Africa. The West African giant has 15 entries in our table, leaving three for Ghana and one each for Togo, Mali, Senegal and Côte d’Ivoire in West Africa, plus one each for Cameroon, Equatorial Guinea and Gabon in Central Africa.

Côte d’Ivoire’s showing is particularly poor. What was the strongest Francophone economy on the continent regularly had a handful of banks in West Africa’s Top 25 until 2000 but a decade of conflict and insecurity has devastated its economy. It remains to be seen whether the end of the conflict will feed through into a stronger economy and financial sector in the near future.

Nigerian banks fill nine out of the sub-regional top 10, with only Togo-based Ecobank Transnational to prevent a Nigerian clean sweep.

The value of the capital base of the region’s banks has changed relatively little over the past year. Société Générale de Banques au Senegal required core capital of $95m to secure 25th position last year, while Banque Internationale du Cameroun pour l’Epargne et le Crédit needed just $1m more to take the same spot in our 2011 survey.

Zenith International Bank retains first position with core capital of $2,405m, up from $2,270m last year, still only just ahead of First Bank of Nigeria, which recorded a similar increase in core capital to $2,221m.

Guaranty Trust Bank has now overtaken Ecobank to take third position. However, the long-term success or failure of many established Nigerian banks will depend on the outcome of the Central Bank of Nigeria’s (CBN) ongoing disposal of banks that were previously nationalised in an effort to save them. A spate of mergers could lead to the creation of a leaner, more manageable group of Nigerian banks.

In the meantime, the CBN is wasting no time in seeking to improve governance and transparency in the nation’s financial institutions. In mid-September, it was joined by Nigeria’s 24 banks to set up a working group in partnership with the Dutch development bank, Nederlandse Financierings Maatschappij voor Ontwikkelingslanden, and the World Bank’s International Finance Corporation to promote responsible financial practice.

CBN governor, Lamido Sanusi said: “The need for Nigerian banks to integrate sustainability into their business processes cannot be overemphasised. The development of an industry standard is a welcome initiative and we will support the banks to ensure that we contribute effectively to the sustainability of not just the financial institutions but of the society as a whole.”

The head of the United Nations Environment Programme Finance Initiative (UNEPFI), Paul Clements Hunt, added: “Today’s decision is a historic commitment by Nigerian regulators and bankers to a better environment. It is inspiring to witness a country coming together to address one of the greatest challenges currently facing humanity.”

International interest

Other banks with international support are seeking to step up their operations in Nigeria amidst the current round of mergers. Standard Chartered Bank Nigeria, for instance, has opened a new branch in Ikeja in Lagos State as it begins to expand its footprint in the country. The group chairman of Standard Chartered, John Peace, commented: “Lagos is an extremely important state in Nigeria. It has always played a pivotal role in the development of the country and whatever happens in Lagos, usually gets replicated positively in other parts of the nation.

“The opening of this branch by Standard Chartered Bank, Nigeria is a positive development for Ikeja’s rapidly growing financial services sector and a testament to the importance of this axis within the state.”

Meanwhile, Stanbic IBTC Bank has been awarded a licence to provide mobile payment services in Nigeria, taking the number of players in the mobile banking sector up to seven. Standard Bank Group already offers mobile banking services in Ghana, South Africa and elsewhere on the continent. The CBN has been keen to enforce the Mobile Payments Regulatory Framework to ensure that past problems with financial mismanagement and corruption in the country’s traditional banking sector are not replicated in the mobile field.

The chief executive of Stanbic IBTC Bank, Sola David-Borha, said: “We consider the licence as another platform and opportunity through which we can showcase our bank’s ability to help customers simplify their lives, using relevant technology to make available products and services targeted at their needs. We will be launching various mobile payments products and services designed to enhance financial inclusion in the country.”