- 16 African banks performed better in terms of profitability and efficiency use of shareholders' fund in the year 2017 across Africa.
In 2017, 16 African banks performed better in terms of profitability and efficiency use of shareholders' fund in the year 2017 across Africa.
Out of the 16 banks in Africa, five of them were Nigerian. The banks led their peers in term of Return on Equity (ROE) last year, according to Business Day research.
ROE measures a corporation's profitability by revealing how much profit a company generates with the money shareholders invested. It is usually calculated as the amount of net income returned as a percentage of shareholders equity.
In the full year 2017 financial reports, GTB posted a market cap of N1.1 trillion ($3 billion) with the highest ROE of 30.17% compared to 28.8% recorded in 2016.
Mckinsey, the global consulting firm, in its 2018 report titled: “Roaring to Life - Growth and Innovation in African retail banking,” said “GTBank has had great success in Nigeria’s affluent segment, based on high service levels. It has been rated best in class in terms of customer satisfaction, a measure of client experience.”
Mckinsey said African customers have a strong need for affordable financial solutions, which points directly to the second winning practise in African retail banking: targeting the right segments with compelling offers of which Nigeria GTBank is a good example.
Here is how the Africa banks performed in 2017:
1. Guaranty Trust Bank
A market cap of N1.1 trillion ($3 billion)
ROE of 30.17%
2. Nigeria’s Stanbic bank
Market cap of N463.2 billion ($1.28 billion)
ROE of 29.6% in 2017
3. South Africa’s Capitec Bank
Market cap of $8 Billion
ROE of 27% in 2017
4. Nigeria’s Zenith Bank
Market cap of N800.6 billion ($2.2 billion)
ROE of 23.3%
5. Firstrand of South Africa
A market cap of $27 billion
ROE of 22.5%
6. Kenya’s Equity Group Holdings
A market cap of $1.78billion
ROE at 21.6%
7. Barclays Bank of Africa
A market cap $11 billion
ROE of 20.1%
8. Kenya Commercial Bank
A market cap $1.38billion
ROE of 19.5%
9. South Africa’s NEDbank
A market cap $10.82 billion
ROEs of 18.1%
10. Standard Bank Group
A market cap $26.5 billion
11. Co-operative Bank of Kenya
A market capitalisation of $976.4 million
ROE of 17%
12. Nigeria’s UBA
A market cap of N369.3 billion ($1 billion)
ROE of 16.78%
13. Barclays Bank of Kenya Limited
A market cap of $639.2 million
ROE of 16.02%
14. Kenya’s Diamond Trust Bank
A market cap of $523.09 million
ROE of 14.2%
15. Nigeria’s Access bank
A market cap of N300 .8 billion ($830 million)
ROE of 12.7%
16. South Africa’s Absa bank
A market cap of $27 billion
ROE of 11.8% in the full year of 2017.
Mckinsey said Africa is the second fastest-growing banking market in the world, taking both retail and wholesale banking together with its ROE more than double the 6% achieved by banks in developed markets.