Nigeria banks drop lower in the Top 1000 World Banks ranking as African banks face mounting challenges

The Banker Magazine ranking of top 1000 world banks has said that “Nigeria banks had a mixed year in 2022; the country’s two largest, Zenith Bank and Access Bank, both saw their Tier 1 capital positions drop by around 8% and their pre-tax profits in dollar terms fall 9.2% and 13.8%, respectively. Fourth-placed United Bank for Africa was the best performer of the country’s largest banks in this year’s rankings, recording a 13.4% rise in Tier 1 capital and a 17.3% rise in pre-tax profits”. 

It further said “after a brief respite in 2021, African banks endured another difficult year in 2022. Rising interest rates and the strength of the US dollar curtailed economic growth across the continent, while South Africa, Nigeria and Egypt– home to 14 of the 25 largest African lenders in The Banker’s Top 1000 World Banks 2023 ranking – all face mounting economic challenges. Local currency weakness acted as a brake on growth and profits for banks across the continent. While this year’s 25 largest African lenders have registered a 5.6% rise in their pre-tax profits, their aggregate Tier 1 capital has contracted by the same amount.

Top 25 banks in Africa

Regional rank	World rank	Bank	Country	Tier 1 capital ($m)
1	155	Standard Bank Group	South Africa	11,690
2	171	FirstRand	South Africa	10,087
3	203	Absa Group	South Africa	8041
4	255	Nedbank Group	South Africa	5925
5	297	Afreximbank	Egypt	4982
6	306	Attijariwafa Bank	Morocco	4847
7	324	Groupe Banques Populaire	Morocco	4389
8	457	Bank of Africa	Morocco	2600
9	460	CIB Egypt	Egypt	2568
10	467	Zenith Bank	Nigeria	2539

“South Africa’s big four held firm in 2022, reporting largely unchanged Tier 1 capital positions even as the rand slipped lower throughout the year and gross domestic product growth slowed to 2% amid increased problems with the country’s electricity network. Standard Bank, which remains the continent’s largest lender by Tier 1 capital and assets, recorded the best pre-tax profit gain among its larger peers, with second-placed FirstRand leading the way in terms of return on assets. Egyptian Banks, the continent’s main engine of Tier 1 capital growth for the previous five years, suffered a sharp reverse in 2022, with an acute economic crisis prompting the Egyptian pound to lose more than a third of its value during the year, with the currency weakening further into 2023.

“While CIB Egypt, the country’s largest private lender, recorded a slight increase in Tier 1 capital in local currency terms in 2022, when converted to dollars it decreased by 36.2%, one of the biggest falls in 2023’s overall rankings. National Bank of Egypt and Banque Misr, the country’s largest banks, had yet to publish or provide end-of-year data for 2022 at time of writing, and are therefore not included in this year’s Top 1000 ranking, having changed their reporting cycle from end of June to end of December.

Highest movers in Africa

Regional rank	World rank	Bank	Country	Tier 1 capital (% ch.)	Tier 1 capital ($m)
1	297	Afreximbank	Egypt	26.92	4982
2	875	Banco de Fomento Angola (BFA)	Angola	24.71	804
3	859	Banco Angolano de Investimentos	Angola	19.97	847
4	668	Equity Bank	Kenya	19.79	1437
5	925	Credit Immobilier et Hotelier (CIH)	Morocco	17.30	699
6	645	United Bank for Africa	Nigeria	13.35	1520
7	965	Banque Internationale Arabe de Tunisie	Tunisia	7.64	616
8	889	Cooperative Bank of Kenya	Kenya	6.31	753
9	940	NCBA	Kenya	5.63	662
10	676	KCB Group	Kenya	1.89	1408

“Lenders in Morocco were also affected by a 12% fall in the value of the dirham during 2022. Attijariwafa, the country’s largest bank, saw its Tier 1 capital and asset base drop by 5.8%, but posted a 6.7% rise in profits in 2022. Africa’s biggest winner in this year’s ranking is development finance lender Afreximbank, whose Tier 1 capital base grew by 26.9% in 2022, seeing it rise 78 positions to 297th place in the overall rankings. The Cairo-based bank announced a capital raising programme in late 2021, which had generated $1.3bn of new capital by the end of 2022. Angolan lenders, meanwhile, caught a break in 2022, as the kwanza strengthened against the dollar thanks to higher oil exports, resulting in the country’s three largest banks moving into the continent’s top 25. Third-largest lender Banco de Fomento Angola is the country’s biggest success story, rising 76 places to 875th in the overall rankings, second only to Afreximbank for percentage growth in Tier 1 capital on the continent.

Top five by return on capital in Africa

Regional rank	World rank	Bank	Country	Return on capital (%)
1	875	Banco de Fomento Angola (BFA)	Angola	34.70
2	562	Capitec Bank Holdings	South Africa	27.70
3	668	Equity Bank	Kenya	26.00
4	921	Faisal Islamic Bank of Egypt	Egypt	25.71
5	460	CIB Egypt	Egypt	25.51