Ten Nigeria banks made this year top 1000 global banks. The top 1000 global banks was released yesterday by the Banker magazine in London. The banks that made the top 1000 global banks which are the top 25 banks in Africa are Zenith, Ecobank, First Bank, Gtbank and Access Banks. Others are, Diamond Bank, UBA, Fidelity and FCMB
According to the banker 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.
Next in the ranking is Gtbank which came 4th in Nigeria and 13th in Africa. The Banker report said that Access Bank is 5th in Nigeria but 15th in Africa with a capital base of $1.398 billion.
Others are Diamond which is 6th in Nigeria and 17th in Africa, UBA ranked 7th in Nigeria and 17th in Africa while Fidelity ranked 8th in Nigeria and 21 in Africa. FCMB on its part was the 9th bank from Nigeria to make the top 25 banks in Africa.
The 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 $1.95bn to $1.78bn. Access Bank, Fidelity Bank and United Bank for Africa have also slipped down the rankings, though Diamond Bank joins the African top 25 at 579th in the global rankings”.
It further said “The difficulties of the South African economy are reflected in its banks’ performances in the 2015 Top 1000 ranking, but elsewhere there is good news for Togo’s Ecobank and First Bank of Nigeria.
A release by the Banker said “For South Africa’s banking sector, the largest in Africa, 2014 passed in a similar vein to 2013 – both years were dominated by the weak performance of the national economy and the ensuing volatility of the rand. In 2013, the rand lost 13% of its value against the dollar, and though 2014 did not see another rapid depreciation, rand volatility remained high. This hampered the ability of South Africa’s banks to improve their capital adequacy. Four out of its top five lenders have fallen in the Top 1000 World Banks 2015 ranking, with a sixth, African Bank, dropping out of the table entirely.
“Standard Bank remains the continent’s largest bank, though it has dropped from 116th to 123rd in the overall ranking and its Tier 1 capital has fallen slightly from $10.56bn to $10.18bn. FirstRand has held its regional ranking position and increased its capital slightly, but Nedbank Group has dropped from 195th position to 216th and has seen its capital base drop to $4.76bn, from $5.11bn. Barclays Africa Group, previously known as Absa Group, would have come third in the African rankings with a Tier 1 capital base of $6.09bn, but is excluded from the main ranking as it is a subsidiary of the UK’s Barclays.
“Elsewhere, Togo-based pan-African lender Ecobank has improved significantly on its 2013 performance, climbing 90 places to 306th and increasing its capital adequacy by “The world’s biggest banks continue to lose ground to Chinese rivals, according to The Banker’s latest ranking of Top 1000 banks. This year HSBC – which has restructured significantly and increased its focus on Asia – slipped from fifth place to ninth. Citigroup – which has also curbed its overseas presence – fell from sixth to seventh place. Royal Bank of Scotland (RBS) fell to 18th place after the UK government bailout thwarted its international ambitions. Before the financial crisis in 2008, HSBC topped the list, Citi placed second and RBS third, measured by capital strength. Meanwhile, Chinese banks are powering ahead in the ranking. China now has three banks in the top five places, with Bank of China moving from seventh place to fourth, and China Construction Bank staying in second place. Agricultural Bank of China moved up from ninth place to sixth.
The top four 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 counterparts.
“However, Chinese banks are not taking as much global market share as their predecessors. ICBC, which tops the ranking for the third year in a row, is aiming to have 10% of its assets outside China in five years’ time. But this is small in comparison with the global banks in their heyday. Brian Caplen, editor of The Banker, said: “At one time the ambition of the largest banks was to have operations in all parts of the world and across all business sectors. Now they are focussing on a few areas in a bid to restore profitability. We may have seen the end of the global bank.”
While global banks are cutting back on employees – Citigroup has reduced staff by 12% since 2011 and HSBC by nearly 8% with further losses to come – China’s ICBC and in contrast China Construction Bank have each increased staff by 13% over the same period. China’s big four banks now employ 1.6 million – 1.5 times more than the number employed by the big four US banks. In most areas of the world banks increased their profits. Suffering heavy losses in 2012 and 2013, eurozone banks have increased their profits by 123% from a low base. African banks increased profits by 18%, Latin American banks by 17% and Asian banks by 7.5%. Asian banks account for more than half of total world profits.
“The worst performance was in central and eastern Europe where profits plummeted 69%, 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%, followed by Africa at 24% and Asia-Pacific at 19%. The eurozone’s return on capital is the lowest in the world at just under 5%.
UK banks continue to lose their global position as Chinese banks power ahead, according
to The Banker’s latest ranking of Top 1000 banks. HSBC fell from 5th place to 9th, Barclays from 12th to 13th and Royal Bank of Scotland from 15th to 18th as they restructured and slimmed down in the wake of the financial crisis. The ranking is based on capital strength. Brian Caplen, editor of The Banker, said: “At one time several UK banks were among a handful of truly global players. But since the financial crisis they have reduced their scope and are focussing on a fewer areas in a bid to restore profitability. We may have seen the end of the UK-based global bank.”
By contrast, UK banks which focus only on the domestic market are holding steady –
Lloyds stayed in 22nd position and Nationwide rose from 119 to 105.
Chinese banks continue to improve their position. ICBC topped the ranking for the third
year in a row. China now has three banks in the top five, with Bank of China moving
from 7th place to 4th and China Construction Bank staying in 2nd place. Agricultural Bank of
China moved up from 9th place to 6th.
Chinese banks also make the most profits. The top four Chinese banks have the highest profits in the world, and collectively Chinese banks make 1.75 times the amount US
banks make and almost 10 times UK profits. In 2008 UK banks made more than Chinese
banks. The restructuring of UK banks has had a negative impact on employment. HSBC, which recently announced a further 50,000 job losses, has reduced its global workforce by nearly 8% since 2011. Most major UK banks have cut staff since the financial crisis while the major Chinese banks have been hiring. ICBC alone now has more employees that the entire UK banking sector.
Profits and returns at UK banks are slowly recovering although they are well below their
pre-crisis levels. Total pre-tax profits increased by 49% to $32.5bn but are still only a
third of their peak performance in 2007. Return on capital is 7.31% which is half the
levels in the Middle East and North America and one third of the levels in Africa and
UK banks are doing better than eurozone banks where the return on capital is a meagre
4.61% despite a 123% increase in profits. The countries with the worst overall banking
losses were all in the eurozone – Greece, Italy, Portugal, Austria and Cyprus – as were
the top 10 banks with largest losses. Italy’s Banca Monte dei Paschi di Siena recorded
the largest losses worldwide at E7.7bn.
“With the UK holding an EU membership referendum next year, the concern must be
that while the EU desperately needs reform, it will be too preoccupied with its own issues
to properly consider arguments made by the UK government,” says The Banker’s editor
Brian Caplen.
