African banks healthy and liquid.

Author:Siddiqi, Moin
Position::TOP 100 BANKS
 
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The total consolidated assets in the African Business Top 100 bank listing reached $1.1 trillion, up by whopping 105% on 2005, while aggregate Tier-1 capital surged 156% to $90.7bn. South African banks, led by the 'Big Five'--Standard Bank (Stanbank), Absa, FirstRand, Nedbank and Investec--continue to dominate our survey comprising 46% and 40% respectively of total assets and capital.

Stanbank and Absa focus mainly on retail banking, whilst Nedbank and FirstRand are more focused on the corporate sector. Investec ranks among the world's best investment houses. Africa's banking assets compare favourably relative to other emerging markets, such as India with $1.2 trillion and Russia's $1 trillion, but fall below Central and Eastern Europe's $2.1 trillion.

The industry, however, is heavily concentrated; 25 premier banks hold about three quarters of the region's financial assets and core capital, equivalent to $881bn and $65.6bn respectively (see Top 100 table).

That leaves only $275bn and $25bn to be shared among 75 banks, of which the five largest (by total assets) are Nationale Societe Generale Bank, Arab African International Bank, Banco Africano de Investimentos, Societe Generale Marocaine de Banques and Banque Marocaine pour le Commerce etl'Industrie.

The pan-African Ecobank Transnational (listed in Abidjan, Accra and Lagos) is a symbol of Africa's economic renaissance. Its strategy is based on closer integration between independent subsidiaries in over 30 countries, which tailor services to the local market, whilst drawing on regional connections, such as shared financial and personnel resources from its head office in Togo. Attijariwafa of Morocco is also expanding retail operations across the continent, mainly in Francophone areas. Attijariwafa is the largest bank in Senegal. The business model adopted by African Bank (micro-credit lender) provides a fine example to sub-Saharan banks. This niche bank has filled the gap between mainstream banks and micro-lenders by focusing on four criteria: affordability, accessibility, simplicity and personal services.

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It provides credit, mortgages, and savings products to low- and middle-income clients and small businesses. Loan applications are assessed quickly by using a sophisticated credit-scoring system--backed by a simplified application process using the latest technology, such as biometric scanners. Nigeria (especially) has huge potential for mass retail banking and micro-finance...

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