By Omoh Gabriel
Zenith Bank PLC has come top of Nigeria banks ranked by the Banker Magazine in its 2020 Top 1000 World Banks ranking. While it emerged as the only Nigeria bank in the top 10 banks in Africa it however is the 10th in Africa and 386th in the World of Top 1000 global banks with a tier 1 capital of $2.789 billion. According to the Banker “the largest four banks in Africa are the major South African players, Standard Bank Group with tier 1 capital of $10.547 billion, FirstRand with $9.163 billion. ABSA Group it said has $7.773 billion and Nedbank Group with $5.731 billion. These are followed by banks from Egypt in which National Bank of Egypt is fifth in Africa with tier 1 capital of $5.673 billion. Attijeriwafa of Morocco is sixth with tier 1 capital of $4.321 billion. Seventh in the top ten in Africa is Groupe Banques Populaire of Morocco with $4.139 billion while Banque Misr of Egypt took the eight position with a tier 1 capital of $2.967 billion in the top ten table. The ninth largest bank in Africa according to the Banker is the CIB of Egypt with $2.943 billion in tier 1 capital.
The Banker said “Africa’s largest bank is Standard Bank which only manages to place 152nd in the Top 1000 World Banks. Despite South Africa’s economic woes, all four banks increased their capital and only Nedbank saw a fall in profits. Egyptian banks staged an impressive recovery increasing pre-tax profits by 56%. Three Egyptian banks topped the table for African banks with the largest increases in Tier 1 capital. Banque du Caire increased its Tier 1 by 76% allowing it to climb 201 places in the Top 1000 to 794.
“African banks are small in world terms but they punch above their weight in profits, according to The Banker’s latest ranking of the Top 1000 World Banks. Africa’s banks have less than 1% of total world bank capital compared to 47% for Asia, 25% for Europe and 19% for North America. The Top 20 banks ranked by Tier 1 capital, a measure of banking safety, are all from these regions. But African banks outperform in profits. They make double the amount expected given their size. They contribute 2% of global profits and deliver a 19.49% return on capital — the third highest level in the world. Brian Caplen, editor of The Banker, said: “Africa is underbanked and has huge growth potential with millions starting to open their first bank account and receive their first credit card. After the financial crisis, international banks pulled back from the region allowing African banks to capture more of the business. The outlook for them is positive, especially if Africa manages to avoid the worst effects of the Covid-19 pandemic.”
This year marks the 50th anniversary of The Banker’s Top 1000 ranking. The first ranking in 1970 contained 300 banks based on assets. A table of the Top 10 (see Table 5) is headed by Bank of America along with six other US banks. The three European banks are the UK’s Barclays and National Westminster (now part of Royal Bank of Scotland) and Italy’s Banca Nazionale del Lavoro now part of France’s BNP Paribas. In 1970 Bank of America topped the ranking with $25 billion in assets. Today’s leader Industrial and Commercial Bank of China (ICBC) has assets of $4.3 trillion which is 172 times larger. Bank of America which placed sixth in the 2020 ranking currently has assets of $2.4 trillion, making it 96 times larger than 50 year ago. Over the same half-century, the world economy has only grown 25 times showing how the expansion of the banking industry has outpaced economic growth.
