African Awards for Excellence 2013: By country

Angola

Best Bank: Banco Angolano de Investimentos

As Angola’s economy makes impressive strides forward, the national regulator has introduced essential tough rules on the banking sector to meet calls for increased transparency and stability. As a result, some banks have taken a hit.

Nevertheless, Angola’s biggest bank by assets, Banco Angolano de Investimentos (BAI), still reported net income of $180 million in 2012 despite higher loan provisions and administrative costs resulting from the bank’s expansion plans, as well as tax increases.

BAI held the top position in the Angolan banking market, with total assets of more than $10 billion, making it one of the biggest banks in sub-Saharan Africa outside South Africa. Over the year, the number of retail clients also increased by 17%.

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Following on from its merger with Trust Bank in January last year – to become the largest bank in the country in terms of assets – Ecobank Ghana has gone from strength to strength to take the award for best bank in Ghana for the fourth year in a row.

At the end of 2012, total assets for Ecobank in Ghana rose to C3.38 billion ($1.7 billion) from C2.1 billion, while the bank’s profit after tax more than doubled to C143 million from C70 million the year before.

Ghana Commercial Bank, the second-largest bank in Ghana, falls behind Ecobank, with total assets in 2012 of C2.98 billion.

Ecobank’s non-performing loan ratio increased from 0.66% in 2011 to 5.1% in 2012, but this was mainly because of the bank’s aggressive growth in SME lending, including via the Trust Bank acquisition.

One of Ecobank’s main aims over the year was to expand operations further into the SME and local corporate market – important drivers for growth in Ghana’s economy – and that was partly achieved via the acquisition, as lending to SMEs is one of Trust Bank’s main strengths.

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Best Bank: Equity Bank

There is intense competition for the best bank in Kenya award between Kenya Commercial Bank (KCB) and Equity Bank. This year, Equity Bank regains the title.

The bank has one of the highest returns on equity in the sector, at 29.5%, and is the second-most profitable bank in the country. Equity Bank’s share price rose 77.6% over the past 12 months, making it the most valuable bank in Kenya.

It also has the largest net interest margin among the listed banks and its cost-to-income ratio is improving. Profit before tax for the bank grew 35.7% year on year in 2012.

Equity Bank’s non-performing loan ratio is slightly higher in 2012 at 3.18% from 2.84%, but this is because the bank has been the first in the country to implement new guidelines in accord with Basle III.

Equity Bank is the leader when it comes to innovation in Kenya. The bank has partnered with MasterCard and Ezetap Mobile Solutions to launch mobile point-of-sale technology that enables mobile devices to be converted into MasterCard card readers with a simple attachment.

Through Equity Bank’s push for financial inclusion, retailers in remote areas are now able to accept safe and convenient payments via cards.

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Best Bank: State Bank of Mauritius

Mauritius Commercial Bank (MCB) focuses more on international expansion, but State Bank of Mauritius (SBM) has focused more on domestic growth and, as a result, is outperforming its main rival on home ground.

MCB is the largest bank in Mauritius by assets and was the winner of best bank in Mauritius in 2012. This year, however, SBM comes out on top because of its strong, sustainable growth and good fundamentals shown throughout the last year.

In 2012, SMB’s net profit increased to MauRs2.6 billion ($83.6 million) from MauRs2 billion and earnings per share rose to MauRs10.14 from MauRs7.80. Return on assets and return on equity improved to 2.69% from 2.29% and to 15.44% from 13.15% respectively.

SBM’s loan growth has also stepped up, from 17.8% in 2011 to 20.7% in 2012, while non-performing loan ratios have decreased from 1.4% to 1.1% over the same period: again highlighting the bank’s successful management and high-quality assets.

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Best Bank: Attijariwafa Bank

Morocco’s biggest homegrown bank is also its best. Like most banks in slow-growth Morocco, Attijariwafa Bank didn’t have an extraordinary year in 2012, but it still grew.

The bank’s deposits were up 5%; loans were up 7.3%; and its Dh4.5 billion ($540 million) profit, up 1% year on year, would have been higher if not for mandatory contributions to a solidarity fund to fight poverty and hedges for political instability in more troubled parts of the region.

Attijariwafa is impeccably connected. Its largest shareholder is a conglomerate led by the royal family. Its client base includes the strongest corporate and retail names in the country. But it also leads by example.

“One of the bank’s competitive advantages is its portfolio of specialized subsidiaries in the likes of consumer finance, mortgages and leasing,” says a fund manager who holds the stock despite its requiring an off-index bet to do so.

Moroccan economic growth is not the most exciting in Africa, so Attijariwafa has focused on expansion into the rest of the continent. But the bank is also one of the most efficient Moroccan banks and partly, as a result, the most profitable, with a return on equity around 50%, higher than the rest of the sector.

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Best Bank: Millennium bim

Outstripping the domestic competition as the largest bank in Mozambique, Millennium bim, an African division of Portuguese bank Millennium BCP, returns as our winner.

By the end of 2012, total assets reached Mt73 billion ($2.45 billion), up 18% year on year. It has 40% market share of total assets; Banco Comercial e de Investimentos, its nearest competitor, has 27%.

In 2012, the bank added 13 more branches, to make 151 outlets. Combined with 385 ATMs, Millennium bim has the widest distribution network in Mozambique.

Millennium bim has 1.17 million customers, the largest number of any bank in the country, up 15% from the year before. It posted a rise of 16.3% in deposits and 11% in credit over the past year.

Consolidated net income for Millennium bim reached Mt3.14 billion by the end of 2012, achieving a return on equity of 26%. Despite costs in the bank’s expansion and narrowing margins, the bank’s cost-to-income ratio remained below 45%.

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For those who know Nigeria it will come as little surprise that GT Bank has been a regular winner of the best bank in the country. GT Bank is a fine institution. It is the most profitable bank in the country, with the largest market capitalization – a big vote of confidence. It had another good year.

However, FirstBank deserves recognition. Of all Nigeria’s top-tier banks, it is the one that has done most to turn around its business model over the past four years. And at least in terms of growth in cheap deposit funding – the main determinant of banking success in Nigeria – this is bearing fruit.

FirstBank’s ability to post much higher deposit growth, at 23% annually, than its main rivals is all the more impressive when one considers that after the demise of Oceanic and the deceleration of asset growth at UBA, it became Nigeria’s biggest bank by far.

It was also a necessity. Previously, the bank had an ageing customer base when a third of the population is under 25. In response, the bank has implemented a branch-building programme in towns where younger people are more likely to live. The bank has reduced the average age of staff at all levels, in addition to launching products oriented towards a more tech-savvy generation. It has also split the retail division between the north and south of the country, given the two regions’ different economic characteristics.

By comparison, among the other top-tier lenders, Zenith is still good, though largely static. UBA bounced back from a loss in 2011, but analysts have their doubts it is sustainable. Access Bank, which bought Intercontinental, deserves credit, but the purchase has left doubts.

Stock analysts have watched FirstBank’s cost base closely. But the message that one-off costs (particularly related to staff rationalization) would not be repeated, appears to have been borne out in the numbers for the first quarter of 2013, when return on equity rose to almost 25%.

That is not to say that profitability in 2012 was not impressive. It was. With return on equity of 18%, absolute profit jumped almost 160% thanks to higher revenue and lower provisions. That followed a 48% year-on-year jump in profit in 2011 and an even bigger rise in 2010.

FBN Capital, the group’s investment banking division, is also making progress in a less-crowded field after central bank reforms. It aims to be top three in all debt, equity and M&A, and certainly looks as if it has the capability to achieve that.

Up to now, however, Standard Bank’s local division and Chapel Hill Denham have the best claim to such an achievement. But in the case of Chapel Hill, it is all the more impressive as it is an independent firm.

Moreover, in a year when the debt markets saw the most interesting bits of activity, Chapel Hill was involved in more of the most important deals. Take the first naira bond for the private-sector arm of the World Bank, the International Finance Corporation: Chapel Hill and Standard Chartered were the leads.

Chapel Hill was also bookrunner on the N80 billion ($500 million) bond for Lagos State: a record-breaking size in the local market for Nigerian states and sub-sovereigns. Chapel Hill also advised Access Bank on its debut Eurobond, a five-year $350 million deal.

There were no primary equity markets deals during the period. But Chapel Hill also has credentials in equities, while in M&A it advised on at least seven deals, including deals related to bank restructurings, new regulations on non-bank subsidies and other transactions in the red-hot consumer sector.

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Best Bank: Bank of Kigali

Euromoney’s inaugural award for the best bank in Rwanda goes to Bank of Kigali, the largest and best-established bank in the country.

Bank of Kigali has 31.5% of total loans and 28.1% of total deposits in the country, and generated over 50% of the sector’s net profits in 2012. In 2012, Bank of Kigali’s total assets grew 12.1% to reach RF322.8 billion ($511.9 million) accounting for a 31.7% market share of assets.

As well as strong financials, the Bank of Kigali shows dedication in promoting financial inclusion in Rwanda through a number of innovative financial solutions. Launched in 2012, the bank’s merchant platform, mPay, enables customers to use mobile phones to pay for bills and shopping at supermarkets and pharmacies. It has also introduced deposit-taking ATMs, accepting both Rwandan francs and foreign-currency deposits at any of its 55 ATM locations.

The bank, which is listed locally, also introduced agency-banking services; at the end of 2011, it had 385 agent locations enabling customers to make cash transactions, open accounts and make micro-loan applications throughout the country.

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Banking in South Africa was dominated by two themes this year: the tragic shootings during the Marikana miners’ strike and the continued boom in unsecured credit, as South Africans of almost all income levels borrowed more for home improvement and other purchases.

But in 2012, South Africa’s biggest bank once again looked like its most successful and most secure. Despite difficulties elsewhere, in South Africa, Standard Bank’s headline earnings rose by 21% in 2012, posting a return on equity of 18%.

In corporate and investment banking in South Africa, the bank’s headline earnings rose 23%, while personal and business banking had an even better year, posting an increase in headline earnings of 25%. Clearly, the unsecured credit boom has not left Standard Bank behind.

Capitec, the main player in unsecured lending, had another good year, boosted by a rights issue. Its share price has risen some 600% since 2008. It has a reputation for being well run. But a profit warning at the other main bank in the sector, African Bank, might spell trouble for Capitec, and equity investors clearly thought so.

Like the unsecured-credit specialists, Standard Bank has started establishing loan distribution centres and branches in train stations and township taxi ranks. It has also experimented with cash-drop boxes for deposits to cut down on security risks at branches.

The bank’s unsecured credit book in its middle-income bracket was posting annual growth of around 35% in mid-2012, and had more than quadrupled in its inclusive-banking segment. But it is among the banks least exposed to a sector that was always going to face troubles, having also grown in home loans recently.

Standard Bank’s corporate and investment bank across the continent also stands it in good stead, a factor recognized elsewhere in these awards. In South Africa, for example, the bank helped finance a new cement plant set up by Nigeria’s Dangote: the biggest South Africa investment by a firm from north of the Limpopo.

For investment banking alone, however, in South Africa, it is Rand Merchant Bank that stands out. Indeed, although it lacks deal flow outside South Africa (something it is in the process of remedying), RMB often comes top in some league tables for Africa as a whole.

In South Africa, in M&A and equity, RMB is the clear leader. And its debt markets business chalked up impressive results too, with rand bonds in the unsecured loans market for such names as African Bank, Capitec, and for property companies – another key theme in South African markets this year – such as Vukile.

In the equity markets, RMB also acted on deals in the real estate sector, and in retail, arranging convertible bonds for Shoprite and JD Group, as well as in the unsecured credit sector, with Capitec’s rights issue. It was also co-lead manager and underwriter in the Lonmin rights offer, the year’s biggest mining ECM deal.

Finally, in M&A, it advised on the $380 million sale of Anglo American’s 74% interest in local metals firm Scaw to the Industrial and Development Corporation of South Africa. In the media sector, it advised on the sale of local firm Avusa to Times Media Group.

RMB also advised on the restructuring and refinancing of Mediclinic, as well as Mediclinic’s acquisition of Emirates Healthcare in Dubai, in addition to other advisory work in cement and other sectors, including deals between South Africa and the rest of Africa.

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Established in 1997, National Microfinance Bank (NMB) is a young bank that is slowly diversifying away from its initial origins as a microfinance lender. Today, it lends to a wide variety of corporate, government and SME clients.

By expanding its reach over time, NMB, which is partly owned by Netherlands-based Rabobank, has become the second-largest bank in Tanzania; it estimates that 40% of the banked population in Tanzania has an account with it.

Partly thanks to diversification, loans have risen by 19% to TSh1.35 trillion ($823 million) in 2012 and deposits were up 27% to TSh2.3 trillion – well above the market averages of 14% and 11% growth respectively. Meanwhile, the NPL ratio has remained low at 2.4%. Profit after tax for the bank has grown by 36% to TSh97 billion for 2012. At the same time, the bank’s share price has risen steadily over the past year from its opening level of TSh850 a share at the start of 2012 to TSh1,120 at the end of 2012. Market capitalization at the end of 2012 was TSh560 billion.

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Beating Zambia National Commercial Bank (Zanaco) to be Euromoney’s best bank in Zambia this year is Standard Chartered: because of its growth, developments in SME lending and support for such sectors as construction and manufacturing (which account for some 20% of GDP).

Standard Chartered’s Zambia profit before tax grew by 50% in 2012 to ZK339.6 billion ($65.3 million), making Zambia one of the bank’s main drivers for a successful year in Africa as a whole. Its market share of deposits and loans grew by 15% and 16.7% respectively. Non-performing loans remained low at 0.4%.

Although the bank does not have Zambia’s biggest branch network, Standard Chartered is making strides to build on its presence. In 2012, the bank’s network added three more branches, making 24 in total, and added 10 ATMs to bring this to 45 in total.

In 2012, Standard Chartered served over 8,000 SME clients in Zambia and provided $34 million of credit to SMEs. In partnership with PwC the bank also provided training for over 100 SME clients on credit requirements and how to prepare credit books.

The bank was the joint mandated lead arranger of a five-year, $700 million refinancing package last October for Konkola Copper Mines, Zambia’s second-largest copper producer.

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