2019

REVIEW

TOP

AFRICAN BANKS
The race to transform
This is a free PDF of our previous edition of the Top 200 Banks.
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 TOP 200 AFRICAN BANKS 2

Contents

Bank to the future 03 OVERVIEW

The race
to transform 
05 RANKING
Our exclusive list 
NICHOLAS NORBROOK
editorial@[Link] 11 PROFILE
Godwin Emefiele 
As these words are written – in fintechs that are not encumbered 13 SOUTH AFRICA
early 2021 – the outlook could not brick-and-mortar legacies. Pain at home and joy
be more different for the African
banks measured in this 2018 rank-
With the pandemic switching the
digital economy into overdrive,
abroad 
ing. Pandemic obliges. The debt banks that get left behind will find
overhang many African countries it harder than ever to catch up. 17 INTERVIEW
are currently facing was present The consumer of tomorrow does Jim Ovia 
back then but was nowhere near as not want to stand in a line in your
systemically threatening. banking hall, ever. 19 DEBATE
Zambia became the first default As Microsoft founder and phi- Private equity vs.


This PDF is free, and not for resale / Think green! Only print if necessary
of the coronavirus era in November, lanthropist Bill Gates once said: public markets
when spiraling debts forced the “Banking is necessary, banks are
country to miss a payment to re- not”. James Mwangi, the CEO of
imburse its creditors. Kenya’s Equity Bank, told The 23 FINTECH
But there are echoes that will be Africa Report last September that Is there a bubble in
familiar. Profitability for Africa’s while its investment in the bank’s Nigeria? 
banks in 2018 had been hit by an- technological overhaul made him
other major event, the collapse of feel relatively confident on that 26 ENERGY FINANCE
commodity prices in 2015, which had front, the arrival of ‘Big Tech’ on More wary of betting
worked its way through the system.
South African banks were being
the scene was keeping him awake
at night. We will be tracking the
on barrels 
dragged down by their sovereign big competitors from China and
rating. Nigeria’s central bank was Silicon Valley this year, especially 28 INTERVIEW
running a foreign-exchange policy during our new event, The African Ade Ayeyemi 
that beggared belief (and, perhaps, Financial Industry Summit, which
made the average person on the will be held online on 10 and 11
street poorer too, stoking inflation March 2021.
because of an unwillingness to fund We will also be undergoing big
the import of foodstuffs). changes this year at The Africa
Plus ça change.... Report – with the digital trans-
Another of the key themes evoked formation not sparing us either.
COVER ILLUSTRATION: ADOBESTOCK

back then seems even more rele- Our paywall will go up in March,
vant today. “Telecoms companies and we want all the readers of
and fintechs are snapping at banks’ these special PDF downloads to
heels, carving out strips from what get early-bird access. To register,
used to be the preserve of general email us at feedback@theafricare-
service banks.” This is a growing [Link], and we will send you
risk, especially for mid-tier banks, an exclusive deal for yourself or
with an ever growing number of your company. 

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 100000

TOP 200 AFRICAN BANKS 3

The race to transform

From the commodity crashes to the rise of a new breed TOTAL ASSETS BREAKDOWN
of technology-driven niche players, the traditional era of North Africa West Africa Central Africa
East Africa Southern Africa
banking is finished. Our exclusive list of Africa’s Top 200
banks shows it: the profitability of Africa’s Top 200 banks in $1.51trn $1.49trn $1.46trn $1.74trn $1.66trn
US dollars in 2018 took a sizeable hit – reaching the lowest
level since 2014. Africa’s top 10 profitable banks represent
nearly 50% of the total profits of our Top 200. A special
mention should go to Stanbic Uganda (#158), which made 2014 2015 2016 2017 2018
number 10 on that list – proof that size and profitability are
not necessarily correlated. +92 TOP 5 FOR ASSET GROWTH
Of course, some wounds are self-inflicted. Attijariwafa % US$bn
Bank (#7) is still trying to digest its purchase of the Egyptian
+62
subsidiary of Barclays Bank. Others have hitched a lift on +56
an economic upswing. The top three Egyptian banks – Misr +41
+34
(#8), CIB (#18) and Alahli (#23) – have all climbed in our
ranking compared to last year.
But the collapse in oil and other commodity prices that 1.05 1.04 1.11 1.85 2.49
began in late 2014 and continued through 2015 has wreaked ECOBANK COOPERATIVE FIRST BARCLAYS EXPORT
havoc with economic operators across the continent. The ZIMBABWE BANK OF BANKING BANK DEVELOP.
Zimbabwe OROMIA CORP. OF GHANA BANK OF
banks in big commodity exporters were among the first in Ethiopia HOLDING Ghana EGYPT
line to suffer and non-performing loans (NPLs) bloomed. Zimbabwe Egypt
Take First Bank of Nigeria (#22), which is well diversified TOP 5 FOR ASSET DECLINE
across the economy. Its exposure to problematic companies % US$bn BANCO
proved a significant hiccup, pulling down its asset quality CAIXA
BANCO DE BANCO DE GERAL BANCO
and preventing it from taking on other, more productive

*Ex Banco Privado Do Atlantico

POUPANÇA BANCO FOMENTO TOTTA DE MILLENNIUM
E CRÉDITO SOL ANGOLA ANGOLA ATLÂNTICO*
lending. On an earnings call, Urum Kalu Eke, director of
SOURCE: THE AFRICA REPORT

Angola Angola Angola Angola Angola

FBN Holdings, which owns First Bank, explained how “the
6.15 1.68 5.49 1.17 4.38
NPL ratio is down to 14.5% as of June 2019, from 25.9% at
December 2018. […] It [offers] significant headroom for us to
increase our exposure in the very lucrative oil and gas sector, -37 -34 -32
-40
where we’ve been shut out effectively over the past three years.” -45
Still at number one, South Africa’s Standard Bank (#1)
managed to post profits of more than $2bn in 2018 but is
constrained by the sinking sovereign rating, which is drying not been successful, often driving borrowers into the hands
up the flows of capital towards South Africa. of under-regulated online lenders (see page 52).
South Africa’s problems are echoed elsewhere on the Regulators have been active in Ghana, too, demanding
continent. As the US Federal Reserve slowly started raising in 2017 a capital increase from ¢120m ($22.2m) to ¢400m,
This PDF is free, and not for resale

rates in recent years, yield-hunting investors withdrew with a deadline of end-2018. The multi-year banking crisis
from Africa. The knock-on for banks has been limited, that ensued – with 420 institutions failing – has been much
partly because governments are dependent on financing criticised, including by President Nana Akufo-Addo, who
from domestic financial institutions. But while that works called the Bank of Ghana’s response “lax”.
out OK for banks in the short term – see the stellar results Chinese investment has provided some respite. Likewise,
for 2017 – the result is industry, services and agriculture all the cutting of US interest rates – the first time it has happened
struggling to get loans, which drags the economy down. since the financial crash of 2009 – could precipitate a new
wave of investors seeking yields in frontier and emerging
Neither a borrower nor a hoarder be markets. That in turn could see a fresh influx of cash and
Nigeria’s central bank has pushed through a law requiring offer banks some space to consolidate and grow.
loan-to-deposit ratios to be 60% by 20 September 2019 – a But there are other rocks in the water, especially for
move it hopes will force banks to start lending rather than those banks stuck in the middle. The mobile revolution
hoarding. Kenyan lawmakers attempted the same, this time has allowed a new swath of ‘branchless’ banks to enter
using an interest-rate cap, which most analysts agree has the market. South Africa’s TymeBank is just one of    

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 TOP 200 AFRICAN BANKS 4

TOTAL LOANS ($bn) TOP 10 MOST PROFITABLE

North Africa West Africa Central Africa
East Africa Southern Africa Standard Bank Group
500
South Africa $2bn
400
FirstRand Banking
300 Group $1.94bn
South Africa
200
Commercial Bank
of Ethiopia $1.29bn
100
Ethiopia
0 Standard Bank
2014 2015 2016 2017 2018 of South Africa $1.11bn
South Africa

AFRICA’S DEPOSITS ($bn) Nedbank Group

500
South Africa
$934m
400
Attijariwafa Bank
300 Morocco $704m

200
Zenith Bank
100 Nigeria $635m

0 National Bank
2014 2015 2016 2017 2018 of Egypt $564m
Egypt

TOTAL NET INTEREST INCOME BREAKDOWN ($bn) Banco de Fomento

50 de Angola $561m
Angola
40
ABSA Bank $555m
South Africa

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30

20
TOTAL PROFITS ($bn)
10
30
0 25.2 25.3
SOURCE: THE AFRICA REPORT

2014 2015 2016 2017 2018

25 22.4 21.4 21.6
NUMBER OF BANKS 19.8
8 20
56 49 31 56
15
2013 2014 2015 2016 2017 2018

    several digital banks to rock the boat for the mid-tier

competitors such as African Bank (#125), which are neither
able to service blue-chip customers nor to battle at the bottom METHODOLOGY
of the pyramid like they used to. WE COMPILED OUR RANKING of Africa’s Top 200 banks
Meanwhile, telecoms and fintechs are snapping at banks’ by sending out detailed questonnaires to more than 1,000
heels, carving out strips from what used to be the hunting financial institutions spread across the continent. Their
preserve of general service banks. In sub-Saharan Africa replies were used to create a systematic ranking of Africa’s
there are more than 450 million unique mobile phone owners top banks based on total asset size. Our list features only
according to industry body GSMA, and 350 million adults the top 200 banks. All data is communicated to us by the
lack a bank account, says the World Bank. banks or their parent companies. These figures relate to the
Africa’s biggest mobile phone company, MTN, has been 2018 financial year. Where that information was unavailable
granted a mobile-money licence in one of Africa’s largest we used 2017 figures, indicated in the rankings by italics.
economies – Nigeria. This does not necessarily imply sudden Banks are removed from the list if they do not supply data
death for Nigerian banks – immediately after listing in Lagos during two consecutive years. The data was converted
in May, MTN Nigeria took out a $653m loan from seven local to US$ using the exchange rates applicable on 31 December
banks. That suggests they will benefit, even indirectly, and 2018. Numbers in the ‘Rank 2018’ column refer to a bank’s
optimists will argue that a greater circulation of money in position in The Africa Report’s ranking of September 2018. 

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TOP 200 AFRICAN BANKS 5

1-40
Rank Rank Net interest
2019 2018 Diff. Bank Country Total assets income Loans Deposits
1 1 0 Standard Bank Group South Africa 147 249 579 7 292 065 77 583 846 94 977 952

2 3 +1 Firstrand Banking Group South Africa 105 755 194 5 857 758 77 080 544 87 800 532

3 2 -1 Standard Bank of South Africa South Africa 94 170 938 4 833 500 64 498 753 70 077 791

4 6 +2 National Bank of Egypt Egypt 86 101 818 ND 24 028 889 56 607 390

5 5 0 Absa Bank South Africa 74 746 177 3 237 541 50 897 896 41 928 942

6 7 +1 Nedbank Group South Africa 72 270 028 3 538 138 50 974 395 5 717 013

7 8 +1 Attijariwafa Bank Morocco 53 317 833 2 339 082 31 897 040 34 714 504

8 9 +1 Banque Misr Egypt 49 313 264 339 156 12 326 957 37 349 872

9 10 +1 Banque Centrale Populaire Morocco 41 467 422 1 779 635 25 536 523 29 626 917

10 12 +2 Investec Group South Africa 32 925 996 573 709 18 120 053 23 656 583

11 13 +2 BMCE Bank of Africa Morocco 32 519 709 1 383 691 19 028 275 20 125 103

12 11 -1 Rand Merchant Bank South Africa 31 367 005 1 246 002 20 445 073 14 870 535

13 16 +3 Banque Extérieure d’Algerie* Algeria 26 913 172 ND ND ND

14 14 0 First National Bank of South Africa South Africa 25 912 097 ND ND ND

15 15 0 Banque Nationale d’Algerie* Algeria 24 382 816 674 791 14 225 371 14 727 477

16 17 +1 Ecobank Transnational Inc. Togo 22 582 196 1 825 171 9 168 669 15 935 999

17 19 +2 Commercial Bank of Ethiopia Ethiopia 19 656 780 ND 3 499 637 15 704 568

18 20 +2 Commercial International Bank Egypt 19 100 382 1 012 045 5 929 927 15 916 292

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19 22 +3 Crédit Populaire d’Algerie* Algeria 16 572 240 593 405 10 399 924 11 473 672

20 21 +1 Zenith Bank Nigeria 16 318 645 809 928 4 995 324 10 111 408

21 18 -3 Wesbank South Africa 15 814 417 ND ND ND

22 23 +1 First Bank of Nigeria Nigeria 15 257 186 778 620 4 613 648 9 553 533

23 25 +2 Qatar National Bank Alahli Egypt 14 132 512 718 450 7 711 549 11 565 980

24 24 0 Zenith Bank Nigeria Nigeria 13 577 919 667 628 4 756 821 7 729 721

25 29 +4 Access Bank Group Nigeria 13 574 390 475 604 5 462 481 7 027 849

26 27 +1 African Export-Import Bank Egypt 13 419 370 489 833 11 134 424 2 365 385

27 30 +3 United Bank for Africa Group Nigeria 13 343 082 844 517 4 699 881 9 176 589

28 26 -2 Arab African International Bank Egypt 12 346 830 75 860 4 371 471 8 837 949

29 28 -1 BADR* Algeria 11 791 258 438 908 7 493 819 9 792 702

30 32 +2 Crédit Agricole du Maroc Morocco 11 218 289 415 175 8 104 045 7 847 113

31 33 +2 MCB Group Mauritius 10 953 584 480 561 5 650 098 8 440 334

32 34 +2 Access Bank Nigeria Nigeria 10 872 634 30 173 4 608 028 5 640 945

33 35 +2 Soc. Gén. Marocaine de Banques Morocco 10 722 921 494 588 8 559 449 6 702 141

34 38 +4 MCB Mauritius 9 915 696 426 923 5 345 931 8 094 832

35 41 +6 United Bank for Africa Nigeria Nigeria 9 840 176 373 467 3 325 815 6 642 056

36 37 +1 Guaranty Trust Bank Nigeria 9 007 319 609 469 505 912 6 230 495

37 36 -1 Bank of Africa Group Senegal 8 776 697 549 474 4 718 605 6 160 974

38 42 +4 Banque de Développement Local* Algeria 7 777 671 347 946 5 668 521 6 171 868

39 40 +1 Banco Angolano de Investimentos Angola 7 296 725 572 534 1 788 825 5 820 222

40 43 +3 BMCI Morocco 7 247 443 316 552 5 489 144 4 817 612

2018 results in thousands of US dollars; *in italics 2017 results; NA: not available

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TOP 200 AFRICAN BANKS 6

41-80
Rank Rank Net interest
2019 2018 Diff. Bank Country Total assets income Loans Deposits
41 48 +7 Dev. Bank of Southern Africa* South Africa 7 204 757 349 603 ND ND

42 46 +4 KCB Group Kenya 6 971 691 700 808 4 449 392 4 795 672

43 44 +1 Capitec Bank South Africa 6 952 613 1 008 589 3 081 752 5 292 191

44 49 +5 CIH Bank Morocco 6 791 159 235 139 4 951 779 3 874 218

45 58 +13 SBM Bank Mauritius Mauritius 6 417 706 277 219 2 894 767 4 802 050

46 47 +1 Atlantic Business International Côte d’Ivoire 6 264 663 289 931 3 271 466 3 386 186

47 31 -16 Banco de Poupança e Crédito Angola 6 149 156 314 410 2 203 729 3 899 959

48 56 +8 Kenya Commercial Bank Kenya 6 068 015 613 614 4 072 167 4 639 862

49 51 +2 Crédit du Maroc Morocco 5 851 596 240 802 4 288 319 5 353 890

50 52 +2 Al Barid Bank Morocco 5 805 196 88 606 451 530 5 292 045

51 62 +11 HSBC Bank Egypt Egypt 5 632 330 378 073 1 868 252 4 475 315

52 59 +7 Equity Bank Group Kenya 5 596 235 404 281 2 900 935 4 126 123

53 57 +4 Trade & Development Bank Burundi 5 557 573 173 529 ND ND

54 53 -1 Banco Economico* Angola 5 520 598 ND 1 072 910 3 898 872

55 39 -16 Banco de Fomento Angola Angola 5 486 004 902 144 952 613 3 967 453

56 55 -1 BGFIBank Holding Corp. Gabon 5 458 380 356 700 3 694 020 3 775 800

57 66 +9 Faisal Islamic Bank of Egypt Egypt 5 376 893 ND ND ND

58 60 +2 Ecobank Nigeria Nigeria 5 361 714 382 181 2 538 736 3 515 894

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59 69 +10 Bank of Alexandria Egypt 5 306 498 310 858 2 132 978 4 394 461

60 54 -6 Banque Int. Arabe de Tunisie Tunisia 5 259 686 277 256 3 547 226 3 824 971

61 98 +37 Bank of Khartoum* Sudan 5 068 109 ND ND 4 155 139

62 64 +2 Arab International Bank* Egypt 4 924 365 144 389 1 078 470 3 112 873

63 67 +4 Arab Bank for Econ. Dev. in Africa Sudan 4 895 046 ND 1 755 281

64 75 +11 Fidelity Bank Nigeria 4 712 479 190 668 2 325 931 2 683 592

65 65 0 Société Arabe Int. de Banque* Egypt 4 686 640 105 743 1 569 338 3 742 805

66 74 +8 Stanbic IBTC Chartered Bank Nigeria 4 558 431 214 293 1 185 634 2 213 076

67 - - Africa Finance Corp. Nigeria 4 487 478 150 985 133 769 2 901 941

68 61 -7 West African Development Bank Togo 4 468 652 94 496 3 134 645 ND

69 50 -19 Banco Millennium Atlântico Angola 4 375 246 216 479 1 353 252 3 358 217

70 73 +3 Equity Bank Kenya Kenya 4 279 846 312 378 2 181 997 3 334 237

71 45 -26 Banco BIC Angola 4 210 812 615 213 1 275 942 2 964 642

72 82 +10 National Bank of Kuwait – Egypt Egypt 4 099 613 154 579 2 155 562 2 965 205

73 76 +3 Co-operative Bank of Kenya Kenya 4 037 426 426 816 2 395 205 2 992 029

74 72 -2 Union Bank of Nigeria Nigeria 4 010 971 151 659 1 297 286 2 349 805

75 83 +8 Land Bank* South Africa 3 996 572 103 244 3 506 475 ND

76 87 +11 Bank Audi Egypt Egypt 3 969 078 125 633 740 033 1 782 506

77 68 -9 Banque de l’Habitat de Tunisie Tunisia 3 957 609 151 417 3 029 666 2 176 629

78 85 +7 First City Monument Bank Nigeria 3 921 757 198 851 1 734 516 2 251 588

79 113 +34 Faisal Islamic Bank Sudan* Sudan 3 895 637 218 957 ND ND

80 70 -10 Banque Nationale Agricole Tunisia 3 833 480 183 979 3 076 236 2 591 467

2018 results in thousands of US dollars; *in italics 2017 results; NA: not available

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TOP 200 AFRICAN BANKS 7

81-120
Rank Rank Net interest
2019 2018 Diff. Bank Country Total assets income Loans Deposits
81 84 +3 Oragroup SA Togo 3 778 994 220 590 2 184 335 2 544 411

82 78 -4 Diamond Trust Bank Kenya Kenya 3 686 541 255 424 1 884 406 2 760 714

83 77 -6 Société Tunisienne de Banque Tunisia 3 495 109 157 278 2 370 003 2 112 039

84 97 +13 Al Baraka Bank Egypt Egypt 3 487 435 105 145 878 321 3 041 985

85 79 -6 BSIC* Libya 3 480 412 143 373 1 249 004 2 058 823

86 88 +2 Egyptian Gulf Bank Egypt 3 437 608 78 080 ND ND

87 71 -16 HSBC Mauritius Mauritius 3 426 421 55 020 1 761 050 2 240 091

88 94 +6 AfrAsia Bank Mauritius 3 413 352 82 290 795 685 3 157 778

89 92 +3 Société Générale Côte d’Ivoire Côte d’Ivoire 3 310 494 222 668 2 210 851 2 678 902

90 104 +14 Barclays Bank of Kenya Kenya 3 170 435 308 362 1 730 972 2 024 300

91 91 0 Société Générale Algérie Algeria 3 150 388 184 085 2 155 653 2 452 034

92 89 -3 Barclays Bank Mauritius Mauritius 3 087 939 131 005 2 257 454 1 482 847

93 93 0 Sterling Bank Nigeria 3 022 004 209 443 1 701 587 2 084 066

94 109 +15 Crédit Agricole Egypt Egypt 2 987 521 167 012 1 139 393 2 450 564

95 80 -15 Amen Bank Tunisia 2 928 031 124 590 1 969 851 1 832 969

96 103 +7 Ahli United Bank Egypt Egypt 2 872 015 ND 1 281 995 ND

97 81 -16 Attijari Bank Tunisia 2 846 821 144 994 1 807 441 2 246 196

98 115 +17 Stanbic Holdings Kenya 2 835 966 118 385 1 430 856 1 869 866

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99 96 -3 Housing and Development Bank Egypt 2 830 736 179 405 759 124 1 888 375

100 128 +28 African Banking Corp. Holdings Botswana 2 804 726 287 490 1 154 113 1 631 797

101 100 -1 Standard Chartered Bank Kenya Kenya 2 785 543 279 112 1 158 039 2 189 016

102 126 +24 Abu Dhabi Islamic Bank – Egypt Egypt 2 755 883 139 226 ND 2 225 002

103 90 -13 First National Bank of Namibia Namibia 2 728 384 110 494 1 975 259 2 183 944

104 118 +14 Suez Canal Bank Egypt 2 644 548 53 722 752 894 2 155 115

105 108 +3 Banque Atlantique – Côte d’Ivoire Côte d’Ivoire 2 613 619 122 649 1 347 106 1 566 947

106 105 -1 CRDB Bank Tanzania 2 595 216 190 423 1 344 495 2 015 485

107 99 -8 Bank Windhoek Namibia 2 585 160 165 427 2 060 538 1 897 517

108 101 -7 Ecobank Côte d’Ivoire Côte d’Ivoire 2 554 113 147 590 1 313 592 1 511 930

109 138 +29 Export Development Bank of Egypt Egypt 2 489 300 64 740 1 113 678 1 936 054

110 106 -4 Banco Comercial e de Investimentos Mozambique 2 479 773 228 128 959 365 1 868 555

111 122 +11 CBZ Bank Zimbabwe 2 449 933 80 394 486 996 2 079 155

112 112 0 National Microfinance Bank Tanzania 2 442 823 211 570 1 398 271 1 860 871

113 117 +4 Banco Int. de Moçambique Mozambique 2 434 042 212 203 809 665 1 787 137

114 132 +18 I&M Bank Kenya 2 426 722 152 546 1 440 805 1 867 421

115 123 +8 Commercial Bank of Africa Kenya 2 392 243 206 918 1 185 873 1 918 111

116 110 -6 Standard Chartered Bank Mauritius Mauritius 2 344 832 81 557 942 156 1 440 203

117 137 +20 Banque Al Baraka d’Algérie Algeria 2 300 000 105 400 ND ND

118 116 -2 First National Bank of Botswana Botswana 2 272 726 204 846 1 414 620 1 605 491

119 120 +1 Gulf Bank Algeria* Algeria 2 214 140 116 945 1 325 974 1 723 537

120 125 +5 GCB Bank Ghana 2 207 867 199 165 576 435 1 708 724

2018 results in thousands of US dollars; *in italics 2017 results; NA: not available

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TOP 200 AFRICAN BANKS 8

121-160
Rank Rank Net interest
2019 2018 Diff. Bank Country Total assets income Loans Deposits
121 111 -10 Standard Bank Namibia Namibia 2 193 079 114 805 1 539 482 1 743 999

122 119 -3 BNP Paribas El Djazair Algeria 2 193 007 144 759 1 366 361 1 718 746

123 129 +6 Ecobank Ghana Ghana 2 152 897 104 000 854 756 1 609 009

124 107 -17 Arab Tunisian Bank Tunisia 2 129 382 81 860 ND 1 546 660

125 102 -23 African Bank South Africa 2 123 146 ND ND ND

126 124 -2 Banque de Tunisie Tunisia 2 116 614 111 709 1 504 720 1 202 619

127 131 +4 NIC Bank Kenya 2 034 056 124 451 1 140 485 1 410 330

128 121 -7 Union Internationale de Banques Tunisia 2 029 123 120 503 ND 1 557 807

129 127 -2 Coris Bank International Burkina Faso 2 004 906 98 667 1 109 664 1 218 539

130 145 +15 Citibank Nigeria Nigeria 1 995 800 52 530 296 621 1 053 401

131 130 -1 BGFIBank Gabon Gabon 1 929 887 ND 1 251 275 1 590 689

132 134 +2 Development Bank of Ethiopia* Ethiopia 1 926 235 ND 1 024 724 18 557

133 152 +19 Awash International Bank Ethiopia 1 921 119 146 046 1 079 265 1 510 370

134 139 +5 Société Ivoirienne de Banque Côte d’Ivoire 1 861 431 114 737 1 232 498 1 357 082

135 165 +30 Barclays Bank of Ghana Ghana 1 852 340 134 010 660 009 972 131

136 140 +4 CBAO Groupe Attijariwafa Bank* Senegal 1 815 144 131 868 1 214 167 1 375 185

137 141 +4 Afriland First Bank* Cameroon 1 802 114 94 439 1 109 809 1 316 688

138 146 +8 Union National Bank Egypt Egypt 1 806 076 53 658 710 012 1 533 104

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139 144 +5 Investec Bank Mauritius Mauritius 1 785 547 48 626 1 034 269 1 036 836

140 - - Attijariwafa Bank Egypt Egypt 1 771 684 127 680 827 106 1 369 734

141 158 +17 Stanbic Bank Zimbabwe Zimbabwe 1 769 228 67 736 387 344 1 508 054

142 135 -7 NSIA Banque Côte d’Ivoire Côte d’Ivoire 1 763 071 109 049 1 215 872 1 256 421

143 95 -48 Banco Sol Angola 1 713 881 213 887 ND 1 307 399

144 - - Rawbank DRC 1 679 534 155 294 1 159 416 665 230

145 150 +5 Société Générale Sénégal Senegal 1 618 774 127 893 1 052 105 1 341 975

146 156 +10 Standard Bank Mozambique Mozambique 1 613 002 149 271 456 694 1 193 384

147 167 +20 Standard Bank Mauritius Mauritius 1 587 170 47 479 228 032 1 387 631

148 169 +21 Dashen Bank Ethiopia 1 578 986 62 954 801 480 1 250 901

149 164 +15 Ecobank Burkina Faso Burkina Faso 1 558 669 73 776 696 780 1 220 641

150 151 +1 Société Générale Cameroun Cameroon 1 556 079 119 799 1 123 360 1 218 350

151 153 +2 Barclays Bank of Botswana Botswana 1 555 907 127 241 1 081 571 1 083 394

152 154 +2 Standard Chartered Bank Botswana Botswana 1 508 439 46 879 684 076 1 118 516

153 133 -20 Banco de Desenvolv. de Angola Angola 1 506 084 267 720 309 253 15 583

154 142 -12 Bank of Africa – Benin Benin 1 498 166 68 533 737 577 1 007 684

155 155 0 Citibank NA Algeria* Algeria 1 478 959 62 693 597 056 1 166 441

156 - - BNP Paribas South Africa South Africa 1 473 206 3 974 129 515 908 096

157 168 +11 Central Africa Building Society Zimbabwe 1 469 030 107 530 779 650 1 167 230

158 157 -1 Stanbic Bank Uganda Uganda 1 456 126 100 148 677 383 1 050 920

159 173 +14 Fidelity Bank Ghana Ghana 1 449 459 145 004 301 260 820 444

160 136 -24 Standard Bank de Angola Angola 1 427 254 117 230 172 905 1 084 536
2018 results in thousands of US dollars; *in italics 2017 results; NA: not available

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161-200
Rank Rank Net interest
2019 2018 Diff. Bank Country Total assets income Loans Deposits
161 160 -1 Bank of Africa – Burkina Faso Burkina Faso 1 375 999 68 979 892 811 990 145

162 170 +8 Natixis Algérie* Algeria 1 378 028 59 444 661 137 ND

163 161 -2 Nedbank Namibia Namibia 1 349 098 56 000 844 826 608 097

164 187 +23 BGFIBank Congo Rep. of Congo 1 341 540 ND ND ND

165 184 +19 Wema Bank Nigeria 1 339 324 102 412 691 000 1 011 607

166 171 +5 Stanbic Bank Botswana Botswana 1 323 107 47 982 1 051 494 1 092 274

167 - - Banque Malienne de Solidarité* Mali 1 317 424 62 727 661 119 749 855

168 159 -9 BICEC Cameroon 1 306 489 90 283 775 301 1 051 773

169 174 +5 Misr Iran Development Bank Egypt 1 292 675 33 145 386 839 1 115 186

170 148 -22 UBCI Tunisia 1 285 146 75 884 915 038 872 359

171 179 +8 Banque de Dévelop. du Mali* Mali 1 282 841 63 382 646 226 848 783

172 177 +5 Stanbic Bank Ghana Ghana 1 277 860 96 035 532 300 881 899

173 185 +12 Stanbic Bank Zambia Zambia 1 235 115 125 742 ND 940 088

174 190 +16 Standard Chartered Bank Ghana Ghana 1 227 710 100 666 268 153 885 969

175 172 -3 Ecobank Sénégal Senegal 1 220 488 73 860 551 493 823 246

176 - - Bank of Baroda Kenya Kenya 1 200 621 62 828 405 731 995 113

177 175 -2 BICICI Côte d’Ivoire 1 179 348 84 889 860 428 1 026 499

178 143 -35 Banco Caixa Geral Totta de Angola Angola 1 166 544 ND 257 136 901 135

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179 196 +17 Zenith Bank Ghana Ghana 1 147 595 87 199 150 971 701 749

180 162 -18 Grindrod Bank South Africa 1 138 147 9 797 457 343 1 043 976

181 - - Bank One Mauritius 1 134 159 28 216 585 963 947 792

182 189 +7 National Bank of Kenya Kenya 1 123 800 77 934 466 321 58 762

183 200 +17 CalBank Ghana 1 116 050 106 936 498 983 634 024

184 - - First Banking Corp. Holding Zimbabwe 1 113 977 65 199 405 508 627 900

185 - - Bank of Abyssinia Ethiopia 1 111 729 ND ND ND

186 182 -4 Société Générale Burkina Faso* Burkina Faso 1 091 632 47 534 731 669 728 754

187 180 -7 Banque Zitouna Tunisia 1 091 680 46 378 822 846 939 864

188 192 +4 SCB Cameroun Cameroon 1 078 081 84 696 568 809 923 881

189 198 +9 Ecobank Mali Mali 1 054 437 63 444 332 954 613 689

190 - - Ecobank Zimbabwe Zimbabwe 1 050 300 80 400 206 200 913 700

191 - - Cooperative Bank of Oromia Ethiopia 1 038 908 42 743 511 373 882 631

192 183 -9 Mercantile Bank South Africa 1 027 925 63 872 683 931 721 201

193 - - Al-Nile Bank for Comm. and Dev.* Sudan 1 004 173 55 135 ND ND

194 176 -18 Bank of Africa – Côte d’Ivoire Côte d’Ivoire 1 003 855 57 129 524 460 660 085

195 - - Banque Nat. d’Investissement* Côte d’Ivoire 997 961 57 456 15 603 ND

196 - - Bank of Kigali Rwanda 982 690 103 757 636 277 595 794

197 - - Prime Bank Kenya 977 327 36 719 358 939 693 692

198 - - United Bank Ethiopia 974 355 60 356 516 877 686 904

199 - - Letshego Group Botswana 973 878 188 645 794 986 45 486

200 178 -22 FMB Capital Holdings Malawi 971 019 138 399 243 300 359 148
2018 results in thousands of US dollars; *in italics 2017 results; NA: not available

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PROFILE

GODWIN
EMEFIELE
‘For us to achieve

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growth, banks
must lend’
ALL RIGHTS RESERVED

The first governor of the Central term – there were four other contenders – pointed to how
close the two men have become.
Bank of Nigeria since the return They are an odd couple: the stern general-turned-ci-
to civilian rule to get two five-year vilian politician with a sceptical view of the business
terms, Emefiele is a crucial player world paired with the veteran commercial banker, alum-
in Buhari’s economic strategy nus of Harvard University and erstwhile enthusiast for
market economics. “Emefiele is a transaction banker,”
says Bismarck Rewane, managing director of Financial
By PATRICK SMITH in Abuja Derivatives Ltd. “He looks at things from the point of
view of net revenue from funds, interest rates spreads,
For three months this year, Central Bank of Nigeria (CBN) provisions for bad loans, and he has a background in
governor Godwin Emefiele was the sole ambassador of accounting.”
Nigeria’s economy in the interregnum between the elections Emefiele’s relationship to Buhari has provoked criti-
and the announcement of President Muhammadu Buhari’s cism because the institution is supposed to be politically
new cabinet. Emefiele used the opportunity to set out his independent. When Buhari announced a ban on the use
priorities: macroeconomic stability, financial inclusion, of official sources of foreign exchange for food imports
more lending and mortgages, higher productivity in the in August, his office said that “the president has directed
factories and on the farms, and lower inflation. In May, the central bank to stop providing foreign exchange for
Buhari’s quick reappointment of Emefiele for a second importation of food.”

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Will the the food import ban boost loans to small businesses. “For us to
production much? Nonso Obikili, TWO-TERMER achieve growth, those whose respon-
chief economist of the Lagos daily 4 August 1961 sibility it is to provide credit must be
Business Day, is sceptical: “It’s not Born in Lagos seen to perform that responsibility,”
a good strategy. If you’re looking at Emefiele said after a meeting of the
large imports – what about fuel? If 1986 Earned a master's bank’s monetary policy committee in
you look at the list of banned imports, in business administration May. He added that the committee was
Nigeria is not self-sufficient in many specialised in finance from the looking at a mechanism to limit the
of these things.” University of Nigeria, Nsukka capacity of banks to put customers’
Achieving food self-sufficiency deposits into government securities.
2001 Named deputy managing
would take four to five years, at least, Nigerian banks have been told they
director of Zenith Bank
says Rewane. “Access to forex is not should use at least 60% of their de-
the only factor. […] There is the need 4 June 2014 Appointed central posits as loans to businesses by the
for more rural roads, availability of bank governor by then-president end of September; the ratios in Kenya
inputs, logistics, security and the Goodluck Jonathan and South Africa are 76% and more
risks of export smuggling.” than 90%, respectively.
David Cowan, chief Africa econo- 16 May 2019 Confirmed Rewane says other policies will be
mist at Citigroup, has been tracking for a second term as needed to boost the private sector.
Nigeria’s rice imports, which are central bank governor “CBN activity is not enough. […]
mainly from Thailand. Soon after There is a need for moral suasion
Emefiele banned forex for rice imports and financial incentives.”
in 2015, Thai exports to Nigeria dropped precipitously
but rose sharply to neighbouring Benin. ‘Targeting the wrong thing’
With a population of about 12 million, Benin’s rice But the policy for which Emefiele has been most crit-
imports quickly found their way across the border to icised is the adoption of multiple exchange rates and

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Nigeria’s market, which is almost 20 times bigger. The use of reserves to defend the naira’s value – a policy
Nigerian government response was to announce a “partial objective he shares with Buhari. “If you want to stimu-
closure” of the border, with extensive security checks on late local production […] you ensure imports are more
all trucks to intercept the smuggled rice. expensive and exports cheaper,” says Rewane. “We’re
targeting the wrong thing. […] We should be targeting
Penalties, regulations the market structure.”
For Rewane and Cowan, the episode emphasises the Cowan sees big limitations in Emefiele’s current stance
limits of the central bank’s powers over economic policy. on the naira. But he adds: “The central bank has overseen
Spending on food imports in Nigeria, now running at an enormous devaluation of the exchange rate over the
about $4bn a year, has been growing, partly due to local past five years and has mitigated its worst effects.”
supply disruptions and security problems such as the Effective monetary policy should pre-empt crises rather
insurgency in the north-east and herder-farmer clashes. than try to solve them, he adds. “The job of the central
“Emefiele sees his role as not just about exchange bank governor is to take away the booze before the party
rates, monetary policy and price stability,” says Rewane. gets started. […] That didn’t happen when the last oil
“He has a development-finance agenda.” The aim is to boom – with prices of over $100 a barrel or more – and
promote growth and local production. In March, the the hangover was pretty severe.”
central bank cut rates and has been using new penalties Charles Robertson, chief economist for Renaissance
and regulations to get banks to lend more to small and Capital, argues that falling prices will push down the value
medium-sized businesses, with mixed results. of the naira and growth rates. A quick deal in the China-
Nigerian banks are reluctant to lend US trade war could bolster oil prices.
to all but the biggest private compa- For Emefiele, so much will depend
nies. Loans from banks and other
financial institutions are about 21%
‘IT’S NOT JUST on factors beyond his control. If world
oil prices head back towards $100 a
of Nigeria’s gross domestic product, ABOUT PRICE barrel, the naira could growth trend
compared with about 60% in South towards 8% per year. But if they fall
Africa. STABILITY. HE HAS below $50, growth and investment
Banks in Nigeria prefer to put their
cash in high-yielding government
A DEVELOPMENT- will tumble again. And like the naira,
the battle-hardened Emefiele will be
securities, rather than make riskier FINANCE AGENDA’ in the firing line again. 

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MIKE HUTCHINGS/REUTERS

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SOUTH AFRICA

Pain at home and joy abroad

Economic prospects are muted Bradley Preston, head of listed investments at Mergence
Investment Managers in Cape Town. “It’s a tough ask.”
in South Africa, but Standard Bank's
Standard Bank got rid of about 2,100 employees between
investments elsewhere in Africa June 2018 and June 2019 in order to help reduce its costs.
offer bright spots as it doubles down Preston points out that a potential downgrading by
on digitalisation and cost cutting Moody’s would automatically affect South Africa’s
membership of some global bond indices. This, he
By DAVID WHITEHOUSE says, would have a short- to medium-term impact on the
flow of money into South African banks, which would
As the largest bank by assets in Africa, Standard Bank (#1) in turn raise their cost of financing. Though he sees
has advantages of diversification and has demonstrated the long-term effect of a downgrade as already priced
that it can withstand hostile operating environments. into the market, Preston expects that non-performing
With Moody’s the only ratings agency still giving the loans (NPLs) and credit-loss ratios will increase for all
South African government an investment-grade rating, South African banks.
the bank has yet to prove that it can manage rising costs Standard Bank is well placed to withstand even a
in its crucial home market. Analysts and investors are worst-case scenario. Paul Hollingworth, managing
worried about slow growth, corruption and high debt director at Creative Portfolios in London, says that the
levels in South Africa’s economy. bank’s rapid growth is bound to lead to a rise in NPLs.
Preventing costs from rising faster than income is Yet Standard Bank has “good underwriting discipline”
“the key issue for all banks in South Africa,” argues and has proven that it can evaluate risk, he says.    

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PERSONAL AND BUSINESS BANKING TOTAL INCOME CORPORATE AND INVESTMENT BANKING
Compound Annual Growth Rate: TOTAL INCOME BY PRODUCT (%)
South Africa 6% - Africa regions 11% - International 20%
R80bn 16
22
R64bn 22 17 2018
R48bn
21 21
R32bn 17 17
2017 23
R16bn
24

SOURCE: STANDARD BANK

0
2013 2014 2015 2016 2017 2018 Global markets South Africa
Global markets Africa regions
R38.7bn R43bn R46.3bn R50.6bn R52bn R52.3bn
Investment banking
R9bn R11.2bn R13bn R15.3bn R14.2bn R15.4bn Transactional products and services South Africa
R852m R1.1bn R1.4bn R1.7bn R1.6bn R2.2bn Transactional products and services Africa regions

    Hollingworth argues that the bank has a robust A key part of Standard Bank’s strategy lies in expanding
outlook. Operating in 20 sub-Saharan countries outside its digital presence to tap into that growth. The bank has
of South Africa, it is geographically well diversified, the scale to multiply small bets on digital banking in new
with strong liquidity ratios, he says. It has shown a markets and launched digital-only banks in Botswana,
“remarkable” ability to retain profitability even during Zambia and Zimbabwe in June, to be followed by Nigeria
economic stress. The bank’s return on equity increased in September. It rolled out digital offerings in Uganda,
to 18% in 2018 from 17.1% a year earlier. Hollingworth Tanzania, Ghana and Kenya in the first quarter of this
highlights that personal banking is especially strong: year, and in Côte d’Ivoire in 2018. In its 2019 first-half
“This is a bank with a rising trajectory of profitability.” results, Standard Bank reported that in-person transac-
Growth in costs is outstripping growth in income, tions dropped by 13% year on year and that nearly all

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however, and there is a need for greater cost con- transactions are now through digital services.
trol, he argues, pointing out that tighter cost control Digitalisation is a double-edged sword because it also
would mean more scope to invest in growth markets. intensifies competition. Banking branches are among
“They need to keep an eye on their efficiency goals,” the first casualties. In June, Standard Bank increased
Hollingworth says. its branch closure plan in South Africa to 104 branches,
Standard Bank continues to shed its non-African from 91. Another 1,200 Standard Bank employees could
operations in order to focus more on the continent. In lose their jobs in the closures.
August, it sold all of its remaining stake in Standard
Bank Argentina to the Industrial and Commercial Bank New digital players
of China (ICBC). Announcing half-year results and a According to a report from professional services firm
5% increase in profit, chief executive Sim Tshabalala PwC, South African retail banking is set to experience a
told reporters that he has his eye on West Africa: “We’re “significant uptick” in competition due to digitalisation.
HEADLINE EARNINGS AND RETURN ON EQUITY
also CAGR
saying that we’re: 10%
(2013_2018) quite comfortable to contemplate PwC says that new digital entrants in South Africa are
appropriately priced acquisitions to the extent that they unconstrained by legacy operating systems and will be
Rm Headline earnings Return on equity (ROE)
might fit with our risk appetite.” The bank obtained an able to establish an “almost unassailable advantage”
30 000licence in Côte d’Ivoire in 2016 and is launch- 20over the universal banks as they are able to launch new
operating
ing operations
24 000 in Senegal, the second-largest economy 16products in as little as three to six months. Established

104
in the Union Economique et Monétaire Ouest banks often take between 12 and 24 months
18 000 12
Africaine regional grouping. In the first half to launch new products, PwC explains. One
of 2019, Standard Bank’s earnings rose in its
12 000 8 of the new digital players in South Africa,
Africa6 operations
000
and stayed relatively flat 4
TymeBank, is targeting one million customers
in South Africa. by the end of 2019.
0
According to Tshabalala, prospects branches will
0 shut in
2013 2014 2015 2016 for2017 2018 Preston at Mergence says that Standard
sub-Saharan Africa overall are good, with South Africa as part of Bank has passed its peak in terms of infor-
19 986 17 137 22 187 23 009 26 270the27 new865plans released
economic growth expected to accelerate mation technology (IT) spending and that
by Standard Bank in
from 2.9% in 2018 13.0
14.2 to 3.5%15.6in 2019. More17.1 June,
15.3 18.0
an increase from IT amortisation costs will decline. But it is
than a third of the countries in the region the previously too early to judge the success of the bank’s
are expected to grow at more than 5% per announced 91 digitisation strategy and the heavy costs
annum, he says. involved, he says.

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The digital strategy also aims at deepening trade STANDARD BANK’S 2018 PERFORMANCE IN AFRICA
and financing links with China. In June Standard Bank
– Industrial and Commercial Bank China (ICBC) is a
minority shareholder – launched its Africa China Agent
Proposition, which connects African importers and
Chinese exporters. The aim is to help African importers
in sourcing goods from China, while easing cashflow
pressures on African businesses. Chinese suppliers
can get a letter of credit for Standard Bank’s Chinese
partner ICBC, which will enable them to supply goods
before payment. Standard Bank’s head of Africa-China Strong performance*
integration, Manessah Alagbaoso, says current arrange- Moderate performance*
ments where importers in Africa have to pay suppliers Focus to improve*
upfront before goods are shipped is unsustainable for Single representation/
African businesses.

SOURCE: STANDARD BANK

development phase
Scale allows Standard Bank to hedge its bets. The bank
is one of the largest oil and gas lenders in sub-Saharan
Africa and has financed companies such as Petrobas *Determined based on
in Nigeria, Kosmos Energy in Ghana and Tullow Oil inputs including growth,
for its African expansion. That leaves it well placed to resilience and returns
benefit from a string of exploration projects over the last
decade that has seen the number of African countries better environment. “To really grow quickly, they will
with proven oil and gas reserves rise to 28. need to see an increase in business confidence, economic
growth and credit extension.”
Fintech investments Currently there is little sign of such transformational

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Standard Bank is also investing in smaller fintech com- change. South Africa’s President Cyril Ramaphosa has
panies as a means to keep tabs on innovations in the to walk a tightrope between popular demand for land
financial sector. In August, it purchased an undisclosed expropriation without compensation on one hand and the
stake in startup Nomanini, which links up informal fears of international investors on the other. A report on
retailers, their customers and banks. In October 2018, land restitution by an inter-ministerial committee led by
Standard Bank also invested in Founders Factory Africa, deputy president David Mabuza was submitted in June.
which is focused on incubating fintech startups across the Standard Bank chief executive Tshabalala is right to
continent. They announced their first five investments highlight the strengthening of property rights (see box)
in June of this year. as a prerequisite to South Africa’s sustained growth,
The home market remains key to Standard Bank’s says Indigo Ellis, Africa analyst at Verisk Maplecroft
financial performance. Preston agrees that South in London. “But we do not expect South Africa to
African banks have shown they can continue to gener- strengthen property rights over the next couple of years,
ate positive, if unexciting, earnings in tough economic rather to confirm their slow degradation, particularly
conditions. But to do better than that, the banks need a in relation to land reform.”
State electricity utility Eskom presents special dangers
HEADLINE EARNINGS AND RETURN ON EQUITY
CORPORATE ANNUAL GROWTH RATE 2013-2018: 10% too. Ramaphosa plans to unbundle Eskom into three
entities – generation, transmission and distribution.
Headline earnings Return on equity (%) This is the “real elephant in the room” but Ramaphosa’s
R30bn 20 “hands are tied”, Ellis says. She expects very little private
R24bn 16 investment to be forthcoming for the utility.
Christopher Marks, head of emerging markets
R18bn 12
EMEA at Mitsubishi UFJ Financial Group, argues that
R12bn 8 South Africa is not standing on a cliff edge. He points
out that Moody’s still has a stable outlook on South
SOURCE: STANDARD BANK

R6bn 4
Africa – and there is still an intermediate step available
0 0 if the agency was to lower that. “Moody’s have been
2013 2014 2015 2016 2017 2018
very patient with Ramaphosa and are doing their best
R17bn R17.1bn R22.2bn R23bn R26.3bn R27.9bn
to give him the benefit of the doubt,” he says. “The
14.2 13.0 15.6 15.3 17.1 18.0 executioner is not yet coming.”

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Regardless of the ratings outcome, Hollingworth says that investment grade rating is “not coming back tomorrow
South Africa has been heading in the right direction since if they lose it. It takes time.”
former president Jacob Zuma stepped down in February The darkest cloud could even turn out to have a
2018. The banks “weathered the Zuma storm and if they silver lining. A Moody’s cut might benefit Standard
can do that, they will do even better under Ramaphosa.” Bank and the South African economy in the long term,
But if Moody’s downgrades South Africa tomorrow, Hollingworth argues. A cut would “put pressure on
there will be an investor “exodus”, Hollingworth says. President Cyril Ramaphosa to deliver. It might en-
Loss of the investment-grade rating “wouldn’t be the courage the government to be even more pro-active
biggest surprise in the world,” however. The bank and committed to economic reform.”
seems well prepared and markets have had plenty of In that case, the hit for Standard Bank in terms
time to digest the prospect, he says, though he does of financing costs could ultimately turn out to be a
not believe the risk is fully priced in by markets. The price worth paying. 
F. MAVUNDA/GALLO VIA GETTY

processing of international trans­

actions, speed up foreign-exchange
payments and settlements while also
SIM TSHABALALA
bringing a new level of transparency
Chief executive, Standard Bank in trades. Working together with
ICBC means that our private permis-
sion blockchain foreign-exchange
‘SUSTAINED GROWTH WILL REQUIRE REFORMS’ payments and settlement solution
provides clients potential access to
and agencies are needed. We will similar ecosystems around the world.

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TAR: How do you see the economic
outlook for South Africa? Will South not be able to generate the resources
Africa hold on to its last investment required for these larger and longer- How successful has the bank been
grade credit rating with Moody’s? term projects unless we implement in reducing costs?
The South African economy the urgent reforms listed above. We are very serious about cost
will remain sluggish for the rest discipline. As a result, our South
of the year, with the International How is your blockchain project in African operations were able to
Monetary Fund forecasting 1.5% foreign-exchange payments progress- accelerate cost-cutting initiatives
growth and the Reserve Bank ing? When will your blockchain become in the second half of 2018. However,
expecting only 1.2%. Standard Bank interoperable with that of Industrial this was not enough to offset other
is optimistic for a moderate recovery and Commercial Bank of China (ICBC)? pressures, such as lower income
of the South African economy over The cloud-based blockchain from interest rates charged on loans.
the medium term. However, a return solution will go live in the second half That resulted in expenses growth
to sustained growth at a pace of 2019 and will initially support both exceeding revenue growth in 2018.
that can reduce unemployment Standard Bank and Stanbic Bank
and inequality will require more partner banks, customers and inter- Do you think that non-performing loan
comprehensive structural reforms, mediaries directly involved in trades, (NPL) levels in South Africa are likely
including reforms to stabilise as well as the interbank network to increase in the coming year?
and strengthen property rights. Swift. [...] We are hopeful that when Because risks have been height-
To set South Africa firmly on the blockchain system finally goes ened we have had to be stricter
the path to prosperity, our country live, it would foster straight-through on our risk acceptance criteria and
also requires new large-scale invest- have been tighter in certain market

1.5%
ments in infrastructure by both segments. So while we do think that
the public and private sectors. Major NPLs will rise, we are sure they
reforms of our primary, secondary, will remain well within risk appetite.
tertiary and vocational education Standard Bank is confident lending
systems, of the justice and health The IMF is forecasting sluggish growth in will pick up with the improved
systems, and of many other local, South Africa’s economy, while the Reserve economic outlook for South Africa. 
provincial and national departments Bank is expecting only 1.2%  Interview by DAVID WHITEHOUSE

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INTERVIEW
LOGO OLUWAMUYIWA ADEYEMI FOR TAR

JIM OVIA
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‘Banks will surf the wave’
Zenith Bank’s co-founder and The weather is certainly improving for Nigeria’s
banks. There are signs of changing fortunes, including
chairman talks to The Africa Report a recovery in the oil price after the late 2015 collapse
about risks and rewards and the ability for the strongest banks to get out from
in the Nigerian banking sector under a pile of bad energy-related loans. Zenith – one of
Nigeria’s largest banks – has done just that. After ratings
agency Moody’s downgraded Zenith in late 2017, one
Interview by NICHOLAS NORBROOK in Lagos year later rival Fitch revised the bank’s rating upwards,
in large part due to Zenith’s solid blue-chip corporate
Jim Ovia’s office at Zenith Bank (#20)’s headquarters, loan business.
next to the Civic Centre in Lagos, dominates the lagoon The bank’s half-year audited results for 2019 show
that ultimately leads out to the Atlantic Ocean. As the gross earnings up 3% to N331.6bn ($916.7m), profits
photographer puts a good-natured Ovia through his before tax up 4% to N111.7bn, and a big jump in fees
postures, the sun starts to shift the stubborn clouds earned from mobile banking, which the bank puts down
that have left the roads in their usual sodden state. to “significant progress in our retail banking initiative”.
“The improvement [at Zenith Bank] no doubt mirrors But Moody’s also spotted another strength at Zenith: its
the recovery of the Nigerian economy,” says Jim Ovia. people. “Decision-making is well spread across a broad

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number of executives to minimise licensing was done in the military

reliance on individuals,” reported REACHING THE ZENITH era!” says Ovia, reflecting on the
Fitch. That team-building strategy 4 November 1951 ad hoc nature of the times. “But
is paying off, giving the founder of Born in Agbor, Delta State, Nigeria I knew there was an opportunity,
Nigeria’s second-most profitable bank so I used it to jump-start a more
in 2018 more reasons to be cheerful. 1979 structured banking business and
Earned a master’s in business pushed to computerise it.”
Talent spotter administration from the University Zenith was one of the first banks in
Several former staff members are now of Louisiana, US Nigeria to bring computers into the
in influential positions. A former Ovia back office, kicking off a new era.
protegé, Uchechukwu Sampson Ogah, 1990 But it was under President Olusegun
Co-founded Nigeria’s Zenith Bank
was appointed in August as minister Obasanjo (1999-2007) that banking
for mines and steel development. 2010 in Nigeria really took off.
Central Bank of Nigeria (CBN) gov- Stepped down as CEO of Zenith
ernor Godwin Emefiele was at Zenith Bank due to new CBN regulations Risk and innovation
for many years in executive roles. “I “The return of Nigeria to democratic
have been proven right after his tenure 2014 rule in 1999 and the attendant un-
was recently renewed, a feat that has Appointed chairman of Zenith leashing of market forces no doubt
not been achieved since the return of Bank's board of directors heralded what we can now call a
Nigeria to democratic rule in 1999,” golden decade for the Nigerian econ-
Ovia tells The Africa Report. omy,” adds Ovia. “The liberalisation
Not everyone is so enthused with the central bank’s of the telecommunication sector opened the sector for
current decision-making though. Malte Liewerscheidt explosive growth. The banking sector consolidation of
of consulting firm Teneo told reporters: “The CBN’s 2004-2006 strengthened Nigerian banks and improved
obsession with the exchange rate has led the Apex bank their resilience. The decade also witnessed a lot of

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to sell more and more open-market operations securities creativity and innovation.”
that offer a high-yield, risk-free alternative for banks, That came to a grinding halt with the ‘over-exuberance’
effectively preventing them from handing out more of many Nigerian banks, which, with too much capital
loans to the real economy.” and not enough opportunity, piled into the stock mar-
With 30% of its loan book concentrated in oil and ket. They often invested in their own stocks to inflate
gas, is Zenith still too exposed to the energy sector? their price. The resulting financial crisis made clear to
“Not necessarily, because we have a robust risk-man- Ovia that “capital and liquidity are prerequisites for the
agement strategy”, says Ovia. “The outlook for global survival of any financial institution.”
oil demand is positive and, barring any significant It was a period that checked Ovia’s own ascension,
disruption to domestic crude production, there is not too. The CBN governor at the time of the banking crisis,
much to worry about.” Lamido Sanusi, passed regulations which prevented bank
Global investors are less convinced, with the share CEOs from running institutions for more than 10 years
price falling 33% in the last six months. Another sys- – a rule that affected both Ovia and Tony Elumelu, who
temic issue for African banks in general, and Zenith in was CEO of United Bank for Africa (#27).
particular, is their high amounts of ‘idle’ capital – large Ovia is also an entrepreneur in the telecoms space,
levels of liquidity. Some Nigerian bankers claim this founding Visafone in 2007 after buying up several oth-
is down to a lack of properly structured opportunities; er telecom operators. It was eventually sold to South
others attribute it to the high returns available at low Africa’s MTN in 2015. Might that have been a strategic
risk by lending to the government. But for Ovia, “It’s misstep? After all, MTN is now launching mobile-money
never a problem to have an adequate services in Nigeria, a serious threat
capital ratio –  far better than the to banks like Zenith.
reverse. Opportunities do come, and
we shall continue to advance credit
‘THE OUTLOOK FOR Ovia recognises the risks, saying
that banks that are not innovative in
to various sectors of the economy, GLOBAL OIL DEMAND adopting digital services will suffer.
especially the non-oil sector.” He sees “a situation where many
The Zenith supremacy dates back IS POSITIVE […], banks will collaborate with fintechs
to a $4m bet that Ovia made with
some co-investors in the 1990s under
THERE IS NOT MUCH to smoothly surf the wave.” Given
his team-building nous, this will be
dictator Ibrahim Babangida. “The TO WORRY ABOUT’ a space to watch. 

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ADRIA FRUITOS FOR TAR

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DEBATE

Private equity
vs. public markets
Should investors looking to get the most out of their money be putting their
cash into listed shares or private-equity deals? The Africa Report talks to the
experts to find out the pros and cons

By DAVID WHITEHOUSE returns of 5.23% and 7.25% over 10 and 15 years, re-
spectively – slightly less than the 6.15% and 7.75% for
The choice between public and private markets is com- the MSCI Emerging Frontier Markets Africa index.
plex enough for investors in developed countries. The Still, private equity held up better in the fourth quarter
standard argument is that while private equity – investing of 2018 as public emerging markets tumbled, with a
in firms that are not listed on stock exchanges – out- 0.67% return in Africa versus a loss of 3.84% for the
performs over the long term, it is logical for investors MSCI Africa index. The association bases its figures
to give up some of this performance in return for the on the Africa Private Equity & Venture Capital Index,
liquidity that public markets provide. made up of 47 private equity and venture capital funds.
The calculations in Africa are a bit different. Figures
from the African Private Equity and Venture Capital Insufficient liquidity
Association (APEVCA) at the end of 2018 show that But the lack of that liquidity in many of Africa’s public
returns from public and private markets in Africa are markets changes the rules of the investment game. In
closely balanced, with private equity showing annual June, Sanjeev Gupta, executive director at the Africa

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27
Finance Corporation (AFC), told The Annual exchange based in Abidjan, says that lack
Debate forum on African investment in of liquidity is “always used as a pretext” for
London that public markets in Africa are avoiding African public markets. Liquidity
suffering from a “very deep-rooted malaise”. in African markets is much better now than
There are plenty of consumer plays available, national stock markets five or 10 years ago, he argues. The idea
but that is at the expense of production, he make up the African that African markets lack liquidity is “too
said. “The continent’s productivity potential Securities Exchanges quick” of a conclusion, he says: “Lack of
is not represented in the capital markets.” Association, prompting liquidity is not a fatality.”
calls for a ‘super
That echoes the consensus among global Liquidity cannot be achieved by decree,
exchange’ on the
investors that sufficient liquidity does not Amenounvé tells The Africa Report, but
continent
exist in African markets and that it will not must be built over the long term, through
for the foreseeable future. According to Capital Markets wider choices of securities, new types of financial in-
in 2030, a study by PwC and the Economist Intelligence struments and liquidity contracts. Low free-float levels
Unit (EIU), fewer than 10% of survey respondents need to be increased, more stock splits are needed to
expect either South Africa or Nigeria to lead in terms cut the price of some shares and make them easier to
of initial public offering (IPO)-originating issuers by trade, and the lending and borrowing of shares has to
2030, with China and India forecast to dominate. The be facilitated, he says. The analyst research function
survey drew on 370 equity capital market participants in Africa also has to be developed. “There is still work
and was carried out in July 2018. The investors polled to do, and we will do it.”
considered liquidity by far the most important factor
in choosing an exchange to list. ‘Fear factor’
“There is zero reason to have 27 exchanges across At the AFC, Gupta still sees a dearth of strategies for
the continent. Zero,” Gupta argued. As with airlines, attracting small and medium-sized enterprises (SMEs)
he said, every country wants to have its own. A “super to public markets. Instead, he argues, there exists a
exchange” for Africa is needed, but Gupta sees no chance range of “subtle deterrents” to listing. In many parts of

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of that happening. In the meantime, the only practical the continent there is a “fear factor” around disclosing
way forward is for new exchanges to keep costs as low personal wealth and the uses to which that information
as possible by using new technology, he said. might be put. That implies a need for much greater
Edoh Kossi Amenounvé, chief executive of the Bourse flexibility in terms of disclosure requirements, he ar-
Régionale des Valeurs Mobilières (BRVM) regional stock gues. “Regulators won’t like to hear what I have to say.”
There is no obvious prospect of such flexibility being
granted. Disclosure is “a hurdle that entrepreneurs have
to get their heads around,” argues Nicky Newton-King,
former chief executive of the Johannesburg Stock
Exchange (JSE). “It’s the price of coming to capital
markets.” She can’t imagine any easing up of JSE
disclosure requirements. “It’s not how capital works.”
Newton-King says the JSE aims to end perceptions
it is an emerging market exchange. She wants it to be
considered on a par with London and New York. She says
cross-national themes such as green investing are the way
forward and sees potential in the development of green
and global exchange-traded funds. Yet she acknowledges
that South African institutional investors are “deeply risk
averse”, with large funds reluctant to invest in SMEs.
The PwC-EIU survey offered little comfort on the
prospects for achieving such a goal. In terms of ex-
changes that global issuers will be considering beyond
their home turf in 2030 for IPOs, Johannesburg was
mentioned by only 13% of respondents, behind Singapore
at 15%. Only 5% saw Nigeria as a possible destination.
No other African country even got a mention.
A growing South African economy is needed to create
new listings, Newton-King says. That requires    

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AFRICAN PRIVATE EQUITY FUNDRAISING AFRICAN STOCK EXCHANGES RELATIVELY ILLIQUID

ROSE SLIGHTLY IN 2018 ($bn) Daily traded value by sector (one-year average) $m
80
SOURCE: AVCA, S&P CAPITAL IQ AND RISCURA ANALYSIS

Consumer Staples Real Estate

4 Financials Utilities
60 Energy Consumer Discretionary
2 Information Technology Telecommunication Services
Materials Industrials
40
Healthcare
2

20
1

0 0
2013 2014 2015 2016 2017 2018 ZMSE LUSE UGSE DAR NGSE CBSE NASE MUSE GHSE CASE BSM

    the state balance sheet to be sorted out. There uncertainty – though e-commerce company Jumia’s
would be “significant implications” if South Africa’s listing this year on the New York Stock Exchange is
last investment-grade rating with Moody’s was lost, excluded from their figures.
she says. Newton-King estimates that she spends about Not many companies will follow Jumia’s example
40% of her time on issues that concern South Africa of listing on a developed market. Christopher Marks,
Inc., rather than the exchange. head of emerging markets EMEA at Mitsubishi UFJ
The Steinhoff corporate governance scandal has done Financial, draws a contrast between Africa and Russia.
little to improve the JSE’s prospects. Newton-King agrees In the Russian case, he says, the legitimisation that
that Steinhoff has left behind a feeling that regulation was achieved by corporate listings on the London
in South Africa has not worked. There’s still “quite a Stock Exchange was often as important as the cash

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bit of work to do” in terms of proving the exchange’s that was raised. “There aren’t that many pan-African
commitment to regulatory standards. It is a challenge candidates that need the legitimacy at this stage,” he
that the exchange can’t tackle alone. “Guardians of says. Management efforts to transform companies are
governance need to be more noisy,” she says. “When probably more important now, he argues.
things seem to be going well, boards should ask the Public markets in Africa face difficulties of scale and
hard questions.” have not shown that they are a “natural nursery” for
dynamic new companies, Marks argues. Public exchanges
Trading costs in Africa are “vulnerable to a high preponderance of
Newton-King points out that the JSE has much lower glamour trades” which in turn leaves investors vulnera-
execution costs than other African exchanges due to ble to disappointment, he says. César Pérez Ruiz, chief
economies of scale. According to the Bright Africa 2018 investment officer at Pictet, agrees, arguing that listed
report published by RisCura, limited pools of licensed companies in Africa are often state-owned enterprises
brokers in other African markets mean investors have and are not run for the benefit of shareholders.
very little scope to switch to a competitor. Yet the low Public markets in Africa remain “relatively shallow,”
volume of trades on African exchanges means that says Alexandre Alfonsi, a partner at Paris-based pri-
brokers charge more to cover costs. Egypt’s relative vate-equity advisory firm Axonia. Public markets give
high liquidity, in comparison with Nigeria, which has only the tip of the iceberg of investable businesses, he
a similar free float, is partly due to trading costs, the says. Private equity provides greater diversification:
report says. Overall, RisCura says that “the investment universe in private equity is

50
investors in Africa need to consider alter- so much bigger.” Axonia this year supported
native asset classes. the African private-equity manager EXEO
Capital raised by African issuers declined Capital in a $146m fundraising.
by 28% in the first half of 2019 to $341m, Stock market investors demand rising
according to Baker McKenzie law firm. share prices, while debt funding often re-
That was caused by an 80% drop in do- African private equity quires tough covenants from the company,
exits are running
mestic capital raising in Africa, with IPOs argues Michelle Kathryn Essomé, APEVCA’s
at a fairly stable level
raising just $85m, compared with $419m of up to 50 per year, chief executive. These may not be easy
a year earlier. Baker McKenzie attrib- according to the chief hurdles for a small African company to
utes the decline to political and economic executive of APEVCA overcome. Private equity can provide    

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NICKY MICHELLE KATHRYN

NEWTON-KING ESSOMÉ
Former chief executive, Chief executive, African
Johannesburg Stock Private Equity and Venture
Exchange Capital Association

‘The JSE is well placed ‘Private equity has played

to engage in order to a leading role in backing

TIISETSO MOTSOENENG/REUTERS; ALL RIGHTS RESERVED

fill a crucial gap in the and nurturing promising
market and to collaborate companies in Africa,
with our listed companies, stepping in to provide
to educate and look funding to enterprises that
after their shareholders have been unable to raise
end-to-end.’ funding from other sources.’

    financial, strategic and operational support with The unpredictability of events in many African
the potential to transform a company, Essomé says. countries makes finding the exit a “stop-go” process,

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Alfonsi likens investing in public markets to sitting Alfonsi says. Due diligence by potential buyers takes
in the back seats of a plane: “You don’t see what is longer than in developed markets, he points out. “People
happening in the cockpit.” In private equity, you can have to pioneer what makes sense for them.”
see the cockpit and the flight instruments, and talk to Private equity in Africa has come a long way since
the pilot. Private equity will “put the muscle and sweat the early 1990s when development finance institutions
in”, and appoint new management if needed, Marks would invest in government-backed projects.
says. Essomé points to Kenya’s Java House coffee shop Increased investment from pension and endowment
chain as an example of a small company that has been funds has reduced the concentration of development
able to achieve scale but wouldn’t have been able to do finance funding in private equity. The total value of
so without private equity. African private equity fundraising increased to $2.7bn
African private equity exits are running at a fairly in 2018 from $2.4bn the year before, APEVCA data
stable level of 40 to 50 per year, says APEVCA’s Essomé. shows, with information technology (19%), consumer
discretionary (15%) and consumer staples (13%) ac-
Boots on the ground counting for almost half of the total number of deals.
Essomé says that the most attractive opportunities now More specialised and targeted funds are emerging,
can be found in real estate, financial services, educa- such as the Mano River Transition Fund launched by
tion, consumer staples and discretionary spending. In Truestone in June. The fund will invest up to $50m in
geographic terms, she says, South Africa still leads, SMEs in Sierra Leone and Liberia.
while Nigeria has also developed a deep private-equity Ultimately, the choice between public and private
market. Egypt and Kenya are also promising markets routes may prove to be a false dichotomy. Sub-Saharan
that are attracting more interest, she says. Due dili- economies that are based on debt need to achieve a
gence for investments, Essomé adds, requires “boots transition to public markets, argues Amenounvé. Private
on the ground.” equity, rather than being in competition with public
The investment case for private equity in Africa markets, is a way to achieve this transition, he says.
can be compelling, but liquidity is the Achilles heel. Current exit routes will not be enough to support the
Finding an exit for private-equity investments in Africa volume of investment into Africa, Amenounvé says. In
is “a big question,” Alfonsi says. Possible paths are China, private equity helped to create the stock market,
an IPO – leading back to the liquidity constraints of he says. In Africa, likewise, “private equity will feed
public African markets – or a sale back to managers. the public market of the future.” 

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Companies like Lagos-based Paystack have created apps to make

saving, spending, money transfer and access to credit easier
AKINTUNDE AKINLEYE/REUTERS

FINTECH

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Is there
a bubble
in Nigeria?
Telecoms firm MTN is going big into multinationals that have built scale and reputation over
the mobile-money sector. Will it crash time. But Interswitch’s ambition and valuation shows
that fintechs are gaining ground.
valuations or raise all boats in the Nigerian fintechs offer a broad range of financial
financial ecosystem? products to customers. Payment processing company
Flutterwave (see page 112); Lidya, which lends to small
By KANIKA SAIGAL and medium-sized enterprises (see box); online savings
platform PiggyVest; and money-transfer company Paga
Interswitch – a digital payments and commerce company are just some of the companies in Nigeria that have
from Nigeria – is planning to list on both the London created apps to make saving, spending, money transfer
and Nigerian stock exchanges by the end of the year. and access to credit easier.
The company has sought advice from international bank Now Nigeria is in the midst of a fintech revolution.
heavyweights including JP Morgan, Citi and Standard The drive towards financial inclusion includes a young,
Bank on the initial public offering (IPO). Estimated tech-savvy population and the prevalence of smartphones,
valuations for the company are as high as $1.5bn. creating an effective environment for new and nimble
Dual listings from Nigerian companies are usually fintech companies to take off. At the same time, the
reserved for the likes of telecoms company Airtel – large Central Bank of Nigeria has introduced a number of

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initiatives. Critically, there was the National Financial Between January 2015 and June 2019, fintech com-
Inclusion Strategy creation of a sandbox for fintechs panies across Africa raised $320m, with the majority
to trial new products – products aimed to encourage focused on South Africa, Kenya and Nigeria according
access to finance for those that have been traditionally to data compiled by Disrupt Africa. And while there has
left out of the system. been exceptional growth in the sector – 60% in the last
This is an incredible about-turn by regulators and two years – this is only a drop in the ocean. Globally,
the government from 10 years ago when mobile money fintech companies raised $39.6bn from investors in
in Africa – particularly in East Africa – started to take 2018, up 120% on 2017’s numbers, according to data
off. Strong lobbying by the banks in Nigeria at the time company CB Insights.
prevented non-bank players from entering the financial
landscape like Safaricom had done in Kenya, for example. ‘Suitcase banking’
Many have the opportunity to flourish in an environ- But whether a bubble is forming boils down to some-
ment where incumbent financial services are unwilling to thing as straightforward as the definition, says Ameya
invest in expensive bricks and mortar. Fintechs are also Upadhyay, principal at VC firm Flourish, a spin-off of
buoyed by the rising middle class, supportive regulation the Omidyar Network investment company.
and the drive towards financial inclusion. “Look solely at the amount of cash flowing into
In the past few years, a number of accelerator pro- the Nigerian fintech space, just a proportion of the
grammes have popped up to of- $320m into Africa, and there isn’t
INVESTMENT IN AFRICAN FINTECH
fer support and advice to develop AS OF FEBRUARY 2019 a bubble. Fintechs in the country
Nigerian startups. Others have been can easily absorb this amount of
accepted on prestigious accelerator Total funding ($m) Deals cash given just how big the oppor-
programmes in the US. International 300 100 tunity is,” says Upadhyay. “But the
investors are beginning to take note. issue in Nigeria is that some com-
Mastercard, Visa and Tencent have panies gain much more attention
all invested in the sector, and a num- than others. As such, a lot of the
SOURCE: CBINSIGHTS

150 50

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ber of global venture capital (VC) investment is focused on a small
companies have helped some of group of companies and there is
Nigeria’s most promising fintech 0 0 a growing risk that valuations are
startups raise early-round funding. 2015 2016 2017 2018 2019 becoming distorted.”
‘Suitcase banking’, which African
Building scale markets continue to grapple with, despite increasingly
“An IPO is one measure of success – perhaps one of the becoming ingrained in the global financial landscape,
most visible,” says Tahira Dosani, managing director at is a major part of the problem. Armed with cash but
Accion Venture Lab. “And for many fintechs in Africa it’s with little local knowledge, investors fly in – or worse,
the holy grail,” she says. Nigerian startups will need to assess investment targets from hubs in Europe or the
build scale first. Mergers, acquisitions or exits through US – hoping to find the next big thing.
secondary sales are essential steps towards an IPO, but Could this be the case with Interswitch? “Whether a
news that Interswitch is making plans show just how fintech deserves this attention is subjective, and this
much the Nigerian fintech landscape is evolving. may influence valuations,” says Upadhyay, without
As Nigerian fintechs gather momentum, questions mentioning specific companies.
are emerging around whether their valuations are In August, South African telecoms giant MTN was
inflated. For those with local expertise in Nigeria’s granted a “super-agent” licence by the Central Bank
fintech ecosystem, however, there is not a bubble in of Nigeria, which will allow the largest telecoms com-

60
what companies are worth. pany in the country to provide financial
“For the most part before an IPO, fintech services to its subscriber base. With these
valuations are under wraps. But companies are newfound powers, Nigeria’s burgeoning
not necessarily overvalued – not at all. At the fintech sector could come crashing down,
end of the day, investors are just going to pay fulfilling fears of a bubble.
what they think these companies are worth,” The number of startups But Accion Venture Lab’s Dosani is not
operating in Africa’s
says Segun Aina, president of the Fintech worried. “Mobile-money licences are positive
fintech space has
Association of Nigeria (FAN). “Nigerian for the ecosystem, creating more payment
grown by more than
fintechs are developing at the margins. It’s a 60% in the past options for consumers and helping drive the
young, vibrant sector and there is plenty of two years, according adoption of digital services. If anything, it
room for growth and investment,” he says. to Disrupt Africa creates a payment infrastructure that fintechs

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can leverage, driving more fintech opportunity. I don’t TUNDE KEHINDE

think this escalates bubble fears,” she says.
Chief executive,
Other players in the sector agree. “The market is
Lidya
very far from a bubble,” says Tunde Kehinde, chief

LIDYA
executive of Lidya. Banks that have stayed away from
SMEs in the past now see a viable route to banking them
by partnering with fintechs in the country. This also ‘THIS IS SOMETHING BANKS
means that they are able to meet financial inclusion JUST CAN’T AFFORD TO DO’
goals. For them, fintechs entering the space is less of
a threat and more of an opportunity. “There is such a Micro, small and medium-sized enterprises (MSMEs)
large gap for financial services and a lot of room for in developing countries have an unmet finance
more entrants and more solutions for customers,” he need of $5.2trn each year, according to data
says. “More solutions from new entrants will be great collected by the International Finance Corporation.
for consumers and will spur innovation as fintechs, In Africa – where small businesses are the

37
alternative financiers, telecoms backbone of economic growth and development –
companies and banks look to be the figure stands at $331bn. Nigeria accounts
the partner of choice for their for a third of Africa’s funding hole. “Nigerian
target customers,” he adds. banks tailor solutions to meet the needs of large,
valuable corporate customers but this is
Fear of an exodus Nearly 37 of every 100 something they just can’t afford to do for smaller
adults in Nigeria
Data from the EFInA Access to companies in the market for smaller, shorter-term
are still unbanked,
Financial Services in Nigeria loans,” says Kehinde.
according to the EFInA
2018 Survey shows that 36.8% Access to Financial “Companies like ours are the only ones that can
of Nigeria’s adult population is Services in Nigeria fill this gap,” he adds. Kehinde speaks in his role
still unbanked, so the pie may be 2018 Survey as chief executive of financial services platform

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big enough for everyone. Lidya, while leaning on his experience as co-founder
For the FAN’s Aina, discussions around whether a and former managing director of online retailer Jumia
bubble is emerging distracts from the more pressing and co-founder of logistics company ACE.
issues facing Nigerian fintech. “As more international He has seen first-hand how the exclusion of small
investment comes in, there is a real risk that controlling Nigerian businesses from the financial landscape
interests leave Nigeria,” he says. has stifled economic growth. “We saw it through our
“Eventually, as fintechs grow and turn a profit, Nigeria’s logistics company,” says Kehinde. “Smaller busi-
economy will not benefit from this growth if they end nesses in Nigeria couldn’t get scale because they
up moving operations and ownership offshore. There couldn’t get access to credit for growth and couldn’t
needs to be a lot more discussion around how we can use our services. Something had to give, so Lidya
develop a dynamic fintech sector in the country and seemed like an obvious solution.”
create incentives to encourage local investment and for Founded in 2016 with his business partner Ercin
Nigerian fintechs to stay here,” he says. Eksin, the company focuses on providing access to
Aina points to the fact that Africa-focused e-commerce credit for SMEs across Nigeria via its online platform.
company Jumia is incorporated in Germany, has a tech Loans can go from $500 to $50,000 at a time.
team based in Portugal and is now listed on the New York Decisions usually take around three days for new
Stock Exchange. Meanwhile Flutterwave’s headquarters customers, but subsequent loans are usually issued
are in San Francisco, digital credit platform Mines also within 24 hours – as long as there haven’t been any
relocated there, and Paystack now has offices in Lagos issues with previous payments. The fintech accesses
as well as San Francisco. data from a number of different enterprise partners
Another challenge for Nigerian fintech growth? The to carry out the necessary due diligence on those
bulk of liquidity is still offshore. “Nigerian capital applying for loans without the need of audited finan-
markets are developing, and money is making its way cials, collateral or even bank statements. “We have
over here. But there is a lot to be gained if companies automated data collection, which cuts costs and
such as ours go to investors in places such as London time in terms of ‘know your customer’ anti-money
and New York,” says Kehinde. Nigeria’s capital markets laundering legislation and a number of other timely
will need to evolve just as quickly as the fintech sector, processes,” Kehinde says. To date, Lidya has issued
if the country wants to keep hold of these new, nimble more than 7,000 loans. 
financial services companies.   Interview by KANIKA SAIGAL

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A new wave of LNG

PERENCO

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projects is taking shape

ENERGY FINANCE

More wary of betting on barrels

A series of gas deals are getting approval as investors deal with shifting winds in
the global energy market and concerns about the future of world economic growth

By OHENEBA AMA NTI OSEI between 2018 and 2025. Africa’s oil and gas industry will
also require $1.6trn and $721bn cumulative infrastruc-
Amidst strong shale production from the US Permian ture investment between 2013 and 2035, respectively,
Basin, trade wars and low oil prices, 2019 has not been according to data from Africa Oil & Power.
a blockbuster year for oil and gas financing in Africa. And with commercial and political risks as well as
Paul Eardley-Taylor, head of Standard Bank’s (#1) oil regulatory setbacks also hindering investments, the bill
and gas sector coverage activities for Southern Africa, could be much higher. Rolake Akinkugbe-Filani, head
explains: “In the last few years, the world’s energy bal- of energy and natural resources at Nigeria’s FBNQuest
ance has completely changed as a result of the Permian. Merchant Bank, says African banks have not been big
So any project is now competing against the Permian players in oil and gas finance. “Most of these projects
for the next decade.” require long-term funding, and because of some of the
Getting promising African projects off the ground regulatory challenges the financial services sector and
does not come cheap and boosting investments in the capital markets in Africa had over the last decade –
energy sector will be key moving forward. According particularly since the financial crisis in 2008 – the ability
to GlobalData, an estimated $194bn will be required to to source money for seven to 10 years tenure locally is
fund 93 oil and gas projects planned across the continent increasingly limited. Commercial banks aren’t really

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93
able to stretch for that long,” she says. buying LNG. And with that sort of Chinese
The final investment decision (FID) on Shell’s demand, it gives people a lot of confidence
long-stalled Bonga South-west offshore field for the next wave of FIDs.”
project in Nigeria has suffered considerable After several successful natural gas dis-
delays due to an outstanding tax dispute with oil and gas projects coveries, Mozambique is set to become a
are being planned
regulators. In February this year, Shell’s head top LNG exporter in the next few years.
across the continent
of upstream Andy Brown told Reuters that The country’s Coral FLNG project was able
between 2018 and 2025,
FID on the multibillion-dollar project, which requiring funding to reach FID in 2017 – first gas is expected
is expected to produce 180,000 barrels of amounting to in June 2021 – despite the volatile and un-
oil per day, will not happen until the issue an estimated $194bn certain global pricing environment. In June
is resolved. 2019, another LNG project led by US energy
And delay costs can add up quickly. “Delayed FID firm Anadarko reached its $20bn FID, the largest single
can also mean you delay other aspects of the project’s LNG project approved in sub-Saharan Africa oil and
value chain. So you’re thinking of bringing ancillary gas. FID on ExxonMobil’s multibillion-dollar Rovuma
infrastructure into the country; that is delayed. You LNG project is also expected by the end of 2019. On the
may have placed orders for certain component parts import front, France’s Total signed a deal in July with
of drilling equipment; that may also be delayed. Some the electricity utility in Benin for a new floating storage
of these things have huge costs, and obviously time is and regasification unit to supply power plants.
money,” Akinkugbe-Filani adds.
The lack of sufficient demand is another barrier hin- Looking beyond banks
dering energy financing across the continent. Initially Other LNG projects awaiting FID on the continent
expected in mid-2016, FID for Equatorial Guinea’s Fortuna include Tanzania’s $30bn LNG venture in the country’s
floating liquefied natural gas (FLNG) project has been Lindi Region, UK-based NewAge’s 1.2m tonnes per
delayed several times due to Ophir Energy’s inability annum (tpa) FLNG project in the Republic of Congo
to source the $1.2bn needed to finance the project. In and a seventh LNG train in Nigeria that would expand

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January 2019, the UK-based firm lost its licence to the the country’s LNG production capacity from 22m to
block that contains the Fortuna discovery. 30m tpa. With a focus on gas, Akinkugbe-Filani says
On the positive side, other projects are picking up, that Africa can look farther afield for good examples:
with a new wave of liquefied natural gas (LNG) pro- “Qatar has been able to monetise its gas resources ef-
jects leading the pack. The Paris-based International fectively to trigger and spark industrialisation across
Energy Agency predicts gas will overtake coal by a number of energies as well as petrochemicals, fer-
2030 to become the world’s second-leading fuel. tilisers, LNG for export and then using that as a base
Gas will play an increasingly significant role as a to develop vibrant cities.”
transition fuel in Africa. In some cases, financing these big projects has required
Standard Bank’s Eardley-Taylor explains: “You’ve got looking beyond traditional banks to more creative non-
prices coming back, which means that companies have bank and capital markets-based funding such as infra-
more free cash flow. You’re expected to have a glut of LNG structure bonds, quasi-debt and private equity funding.
from the Australian and the American projects coming Sourcing funds from development finance institutions,
online. That didn’t happen because the Chinese started international and multilateral finance institutions is
another alternative because they are a “key source of
CAPEX SPENDING ON PLANNED AND ANNOUNCED PROJECTS de-risking a project and opening it up to other sources
ACROSS THE OIL AND GAS VALUE CHAIN IN AFRICA
2018 19 20 21 22 23 24 25
of funding,” says Akinkugbe-Filani.
However, Standard Bank’s Eardley-Taylor argues that
30 Capital expenditure (US$ billions) Number of projects
35 fundraising problems are market- and project-specific
25 30 and in many countries a traditional finance model has
an important role to play.
25
20 “The example of LNG in Mozambique is where tra-
20
15 ditional banking models are absolutely working,” he
15 explains. “So I think a lot of that is about the underlying
10
SOURCE: GLOBALDATA

10 type of projects we’re talking about and what the cli-

5 5 ent’s drive is. If the client is looking to avoid to put in
equity as it happens from time to time, then absolutely
0 0
Eni Sonatrach NNPC Shell Sonangol Exxon Ode-Aye you’re going to need unconventional stretches because
SpA SpA EP Mobil Refinery there’s no equity in there.” 

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 TOP 200 AFRICAN BANKS 28

INTERVIEW

ADE
AYEYEMI

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‘We’re creating a
cashless economy’
ERIC LARRAYADIEU/ACF/JA

The chief executive of Ecobank friction in that transfer process. With the current level
Transnational (#16) reveals how of technology and economics, people can remit money
to the continent in a friction-free way almost instantly.
using tech to formalise remittance
flows will benefit both banks and Many remittances go through informal channels
African economies because they are faster and cheaper. What are the
benefits from formalising remittances?
It’s better for the remittance to go through the formal
Interview by PATRICK SMITH financial system. When it goes through informal systems,
it’s not predictable. The country cannot plan. If you
TAR: How important is finance from the diaspora look at a place like Nigeria, if it knows that it would get
for African economies? $20bn annually in foreign remittances through official
We’re looking at over 50 million people. Each of those channels, it becomes a predictable capital flow.
people earns on average more than 10 times the average
per capita income of people on the continent. Their How will you persuade people to use the banks and
ability to transfer money home to improve purchasing money transfer companies?
power and demand capacity is there. The responsibility The financial services institutions, development
for the banking system is to figure out how to reduce financial institutions and the African Union [AU] want

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TOP 200 AFRICAN BANKS 29

to bring the price down and im- What will the data from formal-
prove the quality. It means making ising remittances and boosting
the exchange rate very close to the BANKING BEYOND BORDERS mobile money be used for?
market exchange rate and making 1998 M-Pesa is a great product because
execution almost instantaneous. Got his first job in banking, working a problem was solved by including
We should allow free competition at Citibank Nigeria people in financial services, but the
to ensure that the banking system government of Kenya was ready
March 2006
behaves responsibly. We cannot Promoted to director for Citibank Kenya, to trade control for inclusion. […]
get good flow at the current rate of Tanzania, Uganda and Zimbabwe Why should people care? It allows
7%-10%. So we believe that the price more information to be available in
needs to come down substantially. September 2013 the days of big data and the ability
I wouldn’t encourage the AU or any Named director for sub-Saharan Africa to analyse that data. And you can
other union to determine the price. at Citibank see a higher level of the transac-
tions passing through. Because […]
What do you think is a fair fee for September 2015 you compare the GDP of Ghana to
remittances? Became chief executive the GDP of New York, and Ghana
of the Togo-based Ecobank Transnational
I think anything more than 3% is is much less than New York. And
too high if you’re going to supply it you start asking the question: ‘Are
instantly. If it’s going to take some we counting this differently? Are
time to execute, then you should be we not able to predict the right
looking at as low as 1%. Then that makes it at a level demand and therefore the right investment level in
that can remunerate capital for supplying the remittance these various countries?’ A lot of investments are
product and that can also attract people that want to do based on a leap of faith. But including large numbers
the remittance. of transactions in the financial system in a cashless
way allows those things that were happening to be

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How can remittances play a more productive role in measured. You can say: ‘There are lots of people
economies? that can demand this product that I want to invest
The first thing is a recognition that there are a lot of in.’ That allows you to make that decision in a much
people living outside that want to support the econo- more informed way.
mies of the countries they came from. [This] will help
to keep people in those countries and improve demand Why did mobile money take longer to get estab-
capacity. We always talk about migration. But if the lished in West Africa than East Africa?
resources sit in the North, the people in the South will As somebody who lives in Togo, a small country,
come looking for resources. [I can say] it’s not a function of your [country’s] size.
There has to be a recognition that remittances are You need leadership to be able to create innovative
important and policy should support them. There is a lot solutions and to be able to put it to market. Kenya just
of conversation about remittance as if it’s a ‘black flow’ demonstrated a faster agility than West Africa. But I
that doesn’t need to be discussed in official quarters. think that’s probably because Kenya didn’t have oil and
The World Bank is now looking at their size and saying they needed to innovate quickly. They’ve done that. The
something needs to be done. rest have learnt from them.
And there are a lot of people that are working, but By the way, the payment systems in some of the
they don’t have papers. We should try and figure out West African markets are faster than some of the US
how to include them in the financial and banking markets. It’s just a question of people who have a
system [in Africa] so that remittance flows can serve problem. They want to solve it. The current level of
a higher purpose. African central technology allows them to get that
bankers need to recognise that the done and we don’t have investment
remittances don’t have to go only to
individuals. It’s much better if they
‘WHEN REMITTANCES in legacy systems that impair the
institutions from getting that done.
flow through the [formal] financial GO THROUGH So today across the continent, the
system of choice by the person doing
the remitting or receiving it. Once
INFORMAL SYSTEMS ability to make payments instantly
is something that we feel very hap-
those things are done, then people THE COUNTRY py about and we can do payments
would demand products based on across African countries as fast as
who can offer the right service. CANNOT PLAN’ we can do payments in Europe. 

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