African Awards for Excellence 2012: By country

Awards for Excellence 2012
Regional Awards for Excellence 2012: Africa
All regions and countries

Angola

Best Bank: Banco Angolano de Investimentos

Sound financials and good growth figures earn Banco Angolano de Investimentos (BAI) the top spot in Angola this year.

BAI has the biggest net assets in Angola and reached the highest level of assets in the history of Angolan commercial banks last year. In 2011 BAI increased its assets by 42% on 2010, reaching $11.9 million in the fourth quarter of 2011. Customer deposits were up by 44% from $7.3 million in 2010 to $10.5 million in 2011.

In addition, BAI delivered an improvement in the quality of its assets, as the non-performing loan ratio of the bank decreased from 10.8% in 2010 to 4.9% in 2011. BAI increased its distribution network from 86 branches in 2010 to 105 in 2011.

Over the past year, it introduced mobile banking and other products, including Kamba Card, a prepaid debit card issued by Visa and BAI, enabling customers to make payments and withdrawals both domestically and abroad.

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Strong organic growth led Ecobank Ghana to rise from the fourth-biggest bank in the country in 2010 to the second biggest in 2011. By the end of 2011, total assets for Ecobank had jumped by 40% on the previous year to C2.1 billion ($1.3 billion) and the bank’s total deposits reached C1.6 billion, up 44% on the previous year.

Ecobank’s story in Ghana continued in the first quarter of this year. Keen to expand on its SME activities, it merged with The Trust Bank (TTB) in January. TTB has a strong presence in the local corporate and SME sectors in Ghana and will provide additional expertise to enable Ecobank to flourish. Now Ecobank has the largest footprint in the country, with 76 branches and 160 ATMs by January 2012, covering eight of the 10 regions.

As a result of the merger, Ecobank now ranks as the largest bank in Ghana in terms of assets, profitability, deposits and net worth, making it the worthy winner for best bank in Ghana.

Best Bank: Kenya Commercial Bank

Facing soaring inflation, capital outflows, currency weakness and volatile monetary policies, Kenyan banks have, in the main, braved the storm over the past year thanks to decent expansion in the real economy and a still-robust hunger for credit.

But after several years of strong industry growth and quality earnings generation – thanks to pent-up loan demand – Kenyan banks face a more competitive future and the prospect of deteriorating asset quality.

Nevertheless, the prospects for Kenya Commercial Bank (KCB) and Equity Bank, the two largest banks in the country by assets, look cyclically and structurally bright, thanks to their risk management, quality of leadership and relative diversification. But KCB, in particular, stands out over the past year for restructuring its management to boost efficiency, cutting costs while expanding its presence in the lucrative SME and retail market, snapping at the heels of Equity Bank.

In the 2011 fiscal year, KCB notched up a 54% year-on-year gain in profit before tax at $170 million while, crucially, posting a 7% gross profit from regional operations.

Although it needs to keep a lid on non-performing loans, KCB is evolving to become a more efficient institution. For now, it also enjoys first-mover advantage in its capacity as the largest east African bank – which will also prove crucial to its domestic prospects as Kenya is set to be the principal economic hub of a more integrated region.

Best Bank: Mauritius Commercial Bank

Although HSBC and Standard Chartered deserve recognition for improvements in their Mauritian businesses this year, Mauritius Commercial Bank (MCB) wins the award.

MCB is the dominant financial institution on the island, with a market share of around 40% in domestic loans and deposits. It also issues over half of the cards in the country.

MCB is the largest firm on the local exchange by market capitalization too, with its roughly $1.5 billion market cap making up almost a quarter of the exchange.

Deposit and loan growth have both been strong, with the former up 11.53% and the latter up 9.61% year on year at the end of the first quarter of 2012. The bank has a growing branch and ATM network, with close to 40% of ATMs in Mauritius belonging to MCB. Profit attributable to shareholders was up 32% in the 2011 fiscal year.

MCB has a growing overseas presence too – it has subsidiaries in four countries and representative offices in two – and its interests abroad look set to expand with the granting of an institutional investor licence from the Securities and Exchange Board of India.

The bank reported approximately 900,000 customers at the end of fiscal year 2011, a 20% increase year on year.

Best Bank: Société Générale Maroc

The Moroccan economy was fortunate to be spared the political turmoil that affected some of its neighbours in 2011. Although 2012 is predicted to be a slightly less successful year, Morocco continues to hold a reputation as something of a safe haven in north Africa.

Attijariwafa remains the biggest bank in the country, but Euromoney’s award this year goes to Société Générale Maroc. In 2011, Société Générale’s Morocco unit posted good growth in profit, loans and deposits alike. Housing loans proved to be a particularly strong area of business for the bank, with year-on-year loan growth of 20%.

Although the bank’s return on equity dropped by 0.9% to 14%, this remains well above the sector average for the year of 9%. Similarly, its cost-to-income ratio of 40.6% is the strongest among Moroccan banks.

Société Générale Maroc was also busy in investment banking and advisory. It advised the Moroccan highway authority on a Dh1.5 billion ($171.3 billion) bond issuance, for example. The unit also assisted the Société Générale group on funding a number of other infrastructure-related projects in Morocco.

Over the past year, Nigeria – one of the few emerging markets to experience a credit-driven banking collapse in the global financial crisis – has been reeling from the ill-effects of the financial bust, despite expectations that monetary support and M&A activity would trigger a spirited rally in banking stocks and engender market confidence more generally.

Despite decent credit growth and resilient earnings at the top-tier banks, Nigerian banking shares lost around a third of their value in 2011 as investors – still scarred by the bad debt crisis – fled.

Against this backdrop, in May Guaranty Trust Bank (GTB), the benchmark for good corporate governance in Nigeria, launched a five-year $500 million bond – the first non-sovereign benchmark bond offering from sub-Saharan Africa outside South Africa in the post-Lehman era – following the liquidity trail paved by the Nigerian sovereign. The deal was another reminder of the market hospitality for the bank, seen as the most transparent, well-managed and consistently profitable Nigerian financial institution by investors and analysts alike.

The bank ducked the Nigerian banking crisis and, over the years, has deepened its retail focus to complement its corporate franchise, becoming one of Nigeria’s top-five lenders by total assets. In the 2011 fiscal year, GTB maintained its position as the country’s most profitable bank, generating N65 billion ($397.5 million) in profit before tax, a 43% year-on-year jump, outcompeting its arch-rival, Zenith Bank, thanks to its well-known success in generating solid income growth and robust cost management. In order to buttress its market position under a new leadership and a more competitive banking environment, it cannily expanded its product offering over the past year with new mobile money accounts and FX transfer capabilities.

Meanwhile, Nigeria’s banking sector clean-up operation – and still-resilient commodities sector – boosted capital market activity more widely over the past year. Local independent investment firm Chapel Hill Denham has emerged at the forefront of equity, debt and M&A activity. The firm boasts the top position in Dealogic’s ranking of investment banks by fee income over the awards period, reeling in around $10 million, a one-third market share.

In a testament to its capital-raising prowess and advisory skills, Chapel Hill was appointed as sole financial adviser by four of Nigeria’s eight nationalized banks, with a mandate to advise each bank’s board on recapitalization, assignments that required the firm to put out four parallel M&A teams. In addition, the bank acted as financial adviser or lead bookrunner on the four capital raisings (totalling $28 billion) by state-owned Asset Management Corporation of Nigeria (Amcon), the vehicle established to buy the debts of distressed lenders.

What’s more, Chapel Hill played a key role in the $35.5 million merger between Africa Oilfield Services and Orwell International Nigeria, which established a precedent for foreign-owned oil and gas companies complying with Nigeria’s new local content regulatory environment. In corporate DCM, Chapel Hill also acted as lead book runner for Lafarge Wapco’s N50 billion bond issuance programme to finance the company’s expansion of a 2.5 million-tonne cement plant.

In sum, over the past year, Chapel Hill has shaped the future of the country’s budding banking and capital markets, demonstrating its capital-raising and advisory capabilities in complex transactions to entrench its status as Nigeria’s leading investment house.

It was a good year for South Africa’s banks. Bad debts were largely already cleared; percentage profit growth at the big four banks was in the twenties. But it is Nedbank that stands out.

In 2011 Nedbank posted 26% growth in headline earnings, which is South Africa’s main measure of bank earnings (it excludes various one-off items). Earnings growth in the retail division was particularly strong.

Standard Bank and Absa both posted 21% growth in headline earnings last year. That is a good figure, although it was partly thanks to cost-cutting, which might position these two banks less favourably for future growth.

First Rand also had strong earnings growth during the period, although underlying revenue was negatively affected by a subdued performance in the second half of 2011 at Rand Merchant Bank. Nedbank, by contrast, generated good growth in both net interest income and non-interest revenue last year.

While provisioning declined last year at Nedbank, analysts reckon it might fall again in 2012. That would further bolster return on equity, which rose to 15.3% last year.

Nedbank’s profitability, remember, was relatively resilient in 2009, as other banks suffered far larger dips in earnings as the global crisis arrived in South Africa. In the first quarter of this year, Nedbank’s net interest income grew 11.5% year on year and non-interest revenue grew 14.9%.

Given that HSBC backed out of an acquisition of Nedbank in 2010, Nedbank makes an interesting comparison with Absa, which was bought by Barclays in 2005. Absa is posting respectable results but it appears to be holding back from the kind of bold moves that might put it ahead in the future.

Nedbank is investing in the business, redeploying capital to more profitable products, and investing more in its staff. A case in point is its extension of a $285 million three-year facility to Ecobank earlier this year.

The arrangement with Ecobank gives Nedbank the right, after 24 months, to become a 20% shareholder in the pan-African lender. If Nedbank chooses to exercise that right, it will give the bank even more of an advantage in serving South African corporates as they increasingly look to resurgent growth in the rest of the continent.

Absa Capital is, nevertheless, showing leadership in debt capital markets in South Africa. The firm comes first in the league table for the period, with both the highest number and volume of deals.

The first example is the $1.5 billion bond for the Republic of South Africa this January. The deal helped the sovereign pre-finance its 2012 maturities at just 4.6% while the markets were open before the next eurozone scare. Absa Capital arranged local-currency deals for municipalities too, in some cases using innovative structures.

In the private sector, Absa raised bond funding in local currency for corporates including a benchmark deal for miner Anglo American. Absa Capital was furthermore bookrunner on a R500 million ($74 million) four-year deal for local property firm Growthpoint, which opened up the market for other issuers in the property sector.

In equity capital markets, Deutsche Bank wins for the number as well as size of deals, relative to its competitors. First, in July, Deutsche was bookrunner on a R1.8 billion capital increase via an accelerated bookbuild for Growthpoint, part of the financing for the acquisition of the V&A waterfront in Cape Town.

In its biggest deal, in September, it was lead adviser to Grindrod, a South African shipping firm, on a R2 billion block trade to finance the expansion of a port in Maputo, Mozambique. In October, the bank was bookrunner on a R795 million deal for property firm Hyprop. Finally, in December, it was sole bookrunner on a R1 billion share placement by Exxaro, a local mining company.

Standard Bank wins the award for best M&A house in South Africa. Standard Bank’s global emerging market contacts and part ownership by Industrial and Commercial Bank of China (ICBC) helped it attract investment into the country from new sources of capital.

Standard Bank acted as lead financial adviser to Metorex, for example, in the $1.4 billion sale of the South African miner to China’s Jinchuan Group. Standard Bank also advised Cyril Ramaphosa’s Shanduka Group on the sale of a 20% stake to China Investment Corporation, a Beijing sovereign wealth fund.

Standard Bank also advised Turkish home appliances manufacturer Arcelik in a $327 million acquisition of a South African equivalent, Defy. This was the largest foreign direct investment in South Africa by a Turkish firm ever.

Standard Bank also advised on M&A within South Africa including a $1.1 billion deal in which furniture firm Steinhoff gained control of local manufacturer of leather, fibres and resin Kap International. Standard Bank was furthermore adviser on a number of Black Economic Empowerment transactions, including a $421 million deal for mining firm Assore, and a $244 million transaction for chemicals firm AECI.

The Ugandan economy has struggled in 2011 and 2012. GDP growth is predicted to be 3.2% for 2012. But in the second half of 2011, the Ugandan central bank has had to increase rates sharply in the hope of controlling inflation, which reached 30% in October. This was the highest rate in 19 years.

Despite the volatile environment, Stanbic Bank Uganda increased pre-tax profit by 84% to USh163.8 billion ($66 million) at the end of 2011, up from USh88.7 billion in 2010.

Stanbic is Uganda’s biggest commercial bank, boasting assets of USh2.7 trillion at the end of 2011, an increase of USh300 billion on the previous year and more than double the second-largest bank in terms of assets, Standard Chartered.

Although Standard Chartered has produced impressive loan growth in Zambia in 2011, it has suffered from relatively flat profits and deposit growth that are less impressive than at Zambia National Commercial Bank (Zanaco).

Zanaco’s pre-tax profits were up by 7.34% in 2011 and deposits were up by an impressive 31.69%, giving it a market share of 17.1%. Loans have grown by 6.29%, while the NPL ratio has shrunk by 3.1 percentage points, leaving it at 7.4%.

The bank has consistently delivered increased profitability and lending since its privatization in 2007. Zanaco’s growth has led to a soaring market capitalization: the bank’s market cap grew by more than 60% in 2011 – although return on equity has slipped to a still impressive 20.7%.

Zanaco has the largest branch network and customer base in the country. The bank has 59 fully fledged branches and 121 outlets in post offices across 74 of Zambia’s 80 districts, giving it the widest distribution network in Zambia.

Zanaco has more than 600,000 customers, but two-thirds of Zambia’s population remains unbanked. Zanaco is keen to target the unbanked population, and with its widespread network it is the bank in the country best positioned to do so.