Magazine article African Business , No. 363
Nigeria's biggest banks continue to dominate our survey of the Top 50 West African companies but this year has been one of reform and consolidation rather than rapid expansion.
In the wake of the global banking crisis, the Central Bank of Nigeria (CBN) was forced to intervene to rescue Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank last August.
The banks' chief executives were sacked in August, as the CBN injected N400bn ($2.56bn) into the five companies. It invested a further N200bn ($1.3bn) in Bank PHB, Equatorial Trust Bank, Spring Bank and Wema Bank in October.
In January 2010, the CBN introduced new regulations to strengthen the banking sector in the long term, introducing a maximum 10-year term for chief executives and preventing CBN senior officials from working for privately owned banks for three years after they leave the CBN.
Confidence seems to have returned to the sector and First Bank of Nigeria has regained top spot in our regional survey with market capitalisation of $2.8bn. Nigerian Breweries comes a close second with $2.7bn, as both Nigerian companies leapfrog last year's winner Sonatel, which is valued at $2.6bn this year.
Despite its higher market value, First Bank recorded an 89% fall in profits for the six months to the end of September 2009. However, its gross earnings increased 32% to N128bn ($844m) and total assets rose 14% to N2 trillion ($13.2bn). The bank argues that it will continue to seek selective expansion and adds: "Our strong capital adequacy ratio of 22% and stable funding base allows us to withstand short-term pressures without deviating from our long-term objectives." First Bank has now opened subsidiaries or offices in the UK, South Africa and France, and the China Banking Regulatory Commission has granted it permission to open a representative office in China.
Perhaps most encouragingly, Nigerian non-telecoms, oil and banking companies have registered higher profits in recent months. Dangote Flour Mills, which has moved up from 38th to 22nd in our regional survey, more than tripled its pre-tax profit to N8.46bn ($55.84m)in the nine months to the end of September, while Nestle Nigeria announced a 16% rise in pre-tax profits to N13.78bn ($91m) for the whole of 2009. It too moves up in our survey from 16th to 10th.
As last year, there are 42 Nigerian companies in the West African Top 50. Cote d'Ivoire and Ghana take five and three positions respectively, with Sonatel the only company from outside West Africa's three biggest economies to be represented. Although it is based in Senegal, Sonatel is listed on the Bourse Regionale des Valeurs Mobilieres in Cote d'Ivoire.
Overall, company values in West Africa have not recovered to the same extent as those elsewhere on the continent over the past 12 months, but the Nigerian banking reforms could inject more confidence into the Nigerian economy as a whole over the year to come.
West Africa's Top 50 companies Regional Rank Company Name Country Value ($m) Rank in 2009 1 37 First Bank Nigeria Nigeria 2,830 2 40 Nigerian Breweries Nigeria 2,714 3 44 Sonatel Cote 2,621 d'lvoire 4 48 Zenith Bank International Nigeria 2,549 5 55 Guaranty Trust Bank Nigeria 2,227 6 66 United Bank for Africa Nigeria 1,768 7 87 Benue Cement Company Nigeria 1,298 8 89 Guinness Nigeria Nigeria 1,258 9 90 Dangote Sugar Refinery Limited Nigeria 1,201 10 96 Nestle Nigeria Nigeria 1,103 11 104 First City Monument Bank Nigeria 1,019 12 108 Stanbic IBTC Bank Nigeria 985 13 116 Access Bank Nigeria Nigeria 912 14 125 Diamond Bank Nigeria 806 15 144 Lafarge Cement Wapco Nigeria Nigeria 633 16 149 Unilever Nigeria Nigeria 581 17 156 Oando Nigeria 564 18 159 Union Bank Nigeria Nigeria 558 19 163 PZ Industries Nigeria 547 20 168 Skye Bank Nigeria 521 21 184 Flour Mills Nigeria Nigeria 440 22 186 Dangote Flour Mills Nigeria 434 23 194 Fidelity Bank Nigeria Nigeria 404 24 196 Ecobank Ghana Ghana 401 25 199 Ecobank Nigeria Nigeria 394 26 204 Oceanic Bank Nigeria 382 27 205 Bank PHB Nigeria Nigeria 380 28 211 UAC Nigeria Nigeria 338 29 213 Total Nigeria Nigeria 338 30 218 Standard Chartered Bank Ghana Ghana 334 31 232 Intercontinental Bank Nigeria 296 32 247 Societe de Limonaderies et Cote 261 Brasseries (SOLIBRA) d'lvoire 33 - Afribank Nigeria Nigeria 253 34 - SocGen Banque en Cote d'lvoire Cote 242 d'lvoire 35 - African Petroleum Nigeria 239 36 - Sterling Bank Nigeria 237 37 - Nigerian Bottling Company Nigeria 237 38 - Unilever CI Cote 235 d'lvoire 39 - Julius Berger Nigeria Nigeria 227 40 - Mobil Oil Nigeria Nigeria 199 41 - Ashaka Cement Nigeria 195 42 - Custodian and Allied Insurance Nigeria 180 43 - GlaxoSmithKline Beecham Nigeria 170 Nigeria 44 - Nestle Cote d'lvoire Cote 159 d'lvoire 45 - Unilever Ghana Ghana 148 46 - UACN Property Development Nigeria 146 47 - Cappa and Dalberto Nigeria 125 48 - National Sports Lottery Nigeria 123 Technology 49 - Cadbury Nigeria Nigeria 120 50 - National Salt Company Nigeria Nigeria 118…