The Rise Of Nigerian Banks
Nigerian banks have been fairing well of recent. Oceanic Bank, UBA and GT Bank were among the banks that the most significant rises in the last year. Oceanic Bank leaped 565 places to now be ranked the 310th top bank in the world while UBA, GT Bank and Access Bank are ranked 392nd, 369th and 359th respectively. I more surprised by the performance of Access Bank. I wasnt expecting them to be so highly ranked. The rankings of other banks will be posted as soon as they are received. Here is an excerpt of the report from The Banker Magazine:
At first and second place were Nigerian banks. Oceanic Bank leaped a staggering 565 places up the rankings from 875 in last year’s rankings to 310 in 2008. The bank’s Tier 1 capital exploded from a meagre $297m to $1.75bn. United Bank for Africa also made spectacular strides, jumping 484 places to 392, with a growth in Tier 1 capital from $296m to $1.25bn.
A third Nigerian bank, Guaranty Trust Bank, also made it into the Top 10 in 2008. It registered Tier 1 capital of $1.38bn, up from $406bn last year, and soared 371 places in the rankings to 369. Nigerian banks’ phenomenal growth was triggered by laws passed in 2005 setting a minimum capital requirement of about N25bn ($195m). The legislation was followed by a consolidation of the banking sector from 89 banks in 2005 to 24 banks today.
In a separate report, The Banker Magazine also reported that Nigerian banks are seriously catching up with their South African counterparts:
The total Tier 1 capital of Nigerian banks in the Top 1000 has more than doubled to $11.29bn in 2008’s rankings from $5.38bn in 2007. It takes Nigeria’s share of the sub-Saharan pie to 34% of total Tier 1 capital, up from 24% in 2007. South Africa’s share of the pie has fallen from 71% last year to just 62% in 2008.
New entries among the world’s Top 1000 banks are Platinum-Habib Bank and Access Bank. In terms of growth, it is Access Bank that has impressed the most. In 2007, it did not even feature in the Top 1000 World Banks, and yet this year it enters the league at number 359, with Tier one capital of $1.43bn.
Other impressive performers this year include Oceanic Bank, which shot up the rankings from 875th in the world in 2007, with Tier 1 capital of $297m, to 310th in the world today, with Tier 1 capital of $1.75bn.
Guaranty Trust Bank also performed well. It leaped 371 places in the global rankings to 369th, with Tier 1 capital of $1.38bn, up from $406m last year. United Bank for Africa also made good headway in the rankings. It is now the 392nd biggest bank in the world with Tier 1 capital of $1.25bn. This is up from 876th place last year, when it had just $296m in Tier 1 capital.
The next step for Nigeria’s banks is to convert such phenomenal capital growth into profits. This year’s figures show that despite such enormous growth, return on capital for the sector has actually fallen from 21.9% last year to 18.6% this year. In South Africa, however, return on capital leaped from 38% to 42%.
Tags: Banks
Banks, Market Analysis, News | 
donne4real | July 15, 2008