Nigerian Shake-Up Not Yet Complete

By Ford, Neil | African Business, November 2006 | Go to article overview

Nigerian Shake-Up Not Yet Complete


Ford, Neil, African Business


Nigeria dominates our table of the Top 30 West African banks more completely than the far larger South African banking sector is able to dominate its equivalent survey.

[ILLUSTRATION OMITTED]

Incredibly, the first 19 places in the regional table are filled by Nigerian institutions, with the rest of West Africa apparently left to pick up the crumbs. Yet these results are a sign both of Nigeria's strength and its weakness. It may possess the largest banking sector in the region and the largest financial institutions, but such a large number of banks, in what is still a fairly limited economy, is certainly a sign of weakness.

Thankfully, the Nigerian government has already implemented a deep-seated banking reform programme and there has been a major programme of mergers and acquisitions over the past year or so.

Once the bank results for the current financial year have been filed, our table should have a very different composition in 2007. There will almost certainly be fewer Nigerian banks than at present, but the gap between the largest Nigerian banks and other banks in West Africa should be much greater. At present, the biggest bank in West Africa is United Bank for Africa, with capital of $411m, closely followed by Intercontinental Bank, with $400m, although First Bank of Nigeria has the largest asset base in the country with $3,784m.

[ILLUSTRATION OMITTED]

The highest ranked non-Nigerian bank in the regional table is Ecobank Transnational in Togo, with capital of $165m. Ecobank has offices and operations spread across the region in its efforts to develop as a truly West African bank. It is perhaps surprising that the three largest economies in the region after Nigeria, Cote d'Ivoire, Ghana and Senegal do not possess larger financial institutions than those listed here, but at least Ghana benefits from having five banks of some size, although Ghana International Bank is registered in the UK.

The severe downturn in Cote d'Ivoire's economic fortunes since the country's descent into civil strife is demonstrated by its limited representation on our table.

Since our survey of Africa's Top 100 Banks last year, Standard Chartered Bank Ghana has overtaken Ghana International Bank as Ghana's largest financial institution. While the latter's capital has grown from $54m to $59m, Standard Chartered has grown from $49m to $71m.

However, this is not quite the picture of the new, private bank overtaking the establishment bank, as Standard Chartered Bank did formerly act as Ghana's central bank. It now controls 20% of the total Ghanaian banking market and has promoted the use of cash machines and personal loans in the country.

As last year, no banks from the Sahel or the Mano River states are listed. This demonstrates how far the Mano River countries must go to redevelop their economies after years of destructive civil war and also indicates the extent to which the region remains rooted to colonial era economic structures in that wealth is still concentrated in coastal areas.

Survey by Neil Ford

West Africa

Regional  Ranking in                                            CAPITAL
Ranking   our Top 100  BANK                          COUNTRY    ($M)

 1        13           United Bank for Africa plc*   Nigeria    411
 2        14           Intercontinental Bank plc*    Nigeria    400
 3        17           First Bank of Nigeria plc*    Nigeria    328
 4        20           Ecobank Transnational         Togo       304
 5        21           Zenith International Bank     Nigeria    293
                         plc*
 6        22           Union Bank plc*               Nigeria    292
 7        26           Guaranty Trust Bank plc*      Nigeria    271
 8        27           Skye Bank plc*                Nigeria    269
 9        28           Diamond Bank plc*             Nigeria    241
10        30           IBTC Chartered Bank plc*      Nigeria    232
11        31           Afribank plc*                 Nigeria    225
12        32           Fidelity Bank plc*            Nigeria    225
13        33           Oceanic Bank plc*             Nigeria    218
14        34           First City Monument Bank      Nigeria    215
                         plc*
15        35           Wema Bank plc*                Nigeria    203
16        36           Nigerian International Bank   Nigeria    201
                         [Citigroup]
17        37           Access Bank plc*              Nigeria    200
18        38           FirstInland Bank plc*         Nigeria    197
19        39           Platinum-Habib Bank plc*      Nigeria    194
20        41           Sterling Bank plc*            Nigeria    193
21        66           Standard Chartered Bank       Ghana       71
                         Ghana Ltd
22        70           Societe Generale de Banques   Ivory       64
                         en Cote d'Ivoire              Coast
23        73           Ghana International Bank plc  United      59
                                                       Kingdom
24        77           Societe Generale de Banques   Senegal     55
                         au Senegal SA
25        81           Ghana Commercial Bank Ltd     Ghana       53

Regional  Ranking in                                 ASSETS  PROFITS
Ranking   our Top 100  BANK                          ($M)    ($M)

 1        13           United Bank for Africa plc*   3,712
 2        14           Intercontinental Bank plc*    2,058
 3        17           First Bank of Nigeria plc*    3,784
 4        20           Ecobank Transnational         2,199   74
 5        21           Zenith International Bank     2,874
                         plc*
 6        22           Union Bank plc*               3,562
 7        26           Guaranty Trust Bank plc*      1,660
 8        27           Skye Bank plc*                  899
 9        28           Diamond Bank plc*             1,187
10        30           IBTC Chartered Bank plc*        778
11        31           Afribank plc*                   893
12        32           Fidelity Bank plc*              950
13        33           Oceanic Bank plc*             2,179
14        34           First City Monument Bank        583
                         plc*
15        35           Wema Bank plc*                  792
16        36           Nigerian International Bank     692
                         [Citigroup]
17        37           Access Bank plc*                907
18        38           FirstInland Bank plc*           479
19        39           Platinum-Habib Bank plc*        792
20        41           Sterling Bank plc*              722
21        66           Standard Chartered Bank         565   25
                         Ghana Ltd
22        70           Societe Generale de Banques     753   11
                         en Cote d'Ivoire
23        73           Ghana International Bank plc    376    7
24        77           Societe Generale de Banques     780   14
                         au Senegal SA
25        81           Ghana Commercial Bank Ltd       573   10

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