Awards of Excellence: Best in the world
Awards for Excellence: Nordic region
Awards for Excellence: North America
Awards for Excellence: Latin America
Awards for Excellence: Middle East
Best regional banks: Citibank, Standard Chartered
With the demise of Meridien BIAO in 1996, the only native bank on the African continent to have expanded significantly outside its own country is South Africa’s Standard Bank and it was part of Standard Chartered until 1987. It is represented in 14 countries in sub-Saharan Africa, with much of its expansion outside South Africa achieved through acquisition. It bought the ANZ Grindlays Africa operations in 1992, Meridien BIAO Tanzania in 1995 and also the Lesotho branch of Barclays bank.
However, in terms of profitability, local market innovation and cross-border wholesale banking Standard Bank is still some way behind the two leading institutions on the continent that tie for our best bank award – Citibank and Standard Chartered.
Citibank is the only bank to have a significant presence in both francophone and anglophone parts of the continent. It is now represented in 14 African countries, spread throughout the continent. In Algeria it is upgrading its operation from a representative office to a full bank and in Sudan it remains the only international bank. Its strategy is to open up in even more countries in central, southern and west Africa. Its strategy remains to provide its customers with access to international markets while being firmly embedded as a significant local player. As one banker comments: “The dollar is a mightier weapon than historical links.”
The bank concentrates in Africa on cross-border wholesale banking. If local companies need access to the international capital markets or if foreign companies need foreign exchange or financing in a domestic African market, then Citibank will compete for that business.
The bank is less interested in establishing itself as a dominant local retail and lending bank. That role is fulfilled by Standard Chartered, the only bank that considers Africa a core part of its global business (Citibank does not break out African revenues but combines them with other markets in Europe and the Middle East). Nigel Dudley/Simon Brady
Ghana
Best bank: SSB Bank
Best foreign bank: Standard Chartered
Best securities firm: Databank
In Ghana, a 26% rise in profits to C33.7 billion ($15 million) in 1997 on top of a 55% increase the previous year has reinforced the position of SSB Bank (formerly Social Security Bank) as the most successful local bank. Privatized in 1995 and boosted last year when a consortium of emerging-market investment funds bought a 52% stake, SSB has completed the transformation from vehicle for the government’s social security fund to competitive commercial bank.
SSB has been the quickest of the local banks to respond to increased competition in the industry. It has modernized its operations by computerization and better financial management systems. It is also improving its services by offering products such as doorstep banking for corporate clients and credit cards.
A series of innovations from Standard Chartered, including its being the first bank in the country to introduce cedi/dollar forward contracts (a contract with Ashanti Goldfields Corporation has already been signed) and a pioneering role in the introduction of electronic banking, including paying consumer bills through ATMs, has given a narrow win over Barclays in the vote for best foreign bank. Standard Chartered’s profits rose by 73% in 1997, making it the most profitable bank in Ghana; deposits rose by 40% and the bank has more than half the business from the timber industry, Ghana’s third-largest export earner.
Among the brokers Databank has built on its reputation for providing the best-quality research on Ghana’s economy and the fastest and most efficient service on the Ghana Stock Exchange. The firm recently finished the London and New York roadshows for its West Africa Fund – the first indigenously sponsored equities fund for the region. Investors have already pledged $15 million and the target is $30 million. In the last year it has helped a local company, Akwaaba International, buy a stake in UTC estates and then launch a tender offer to give the firm control by picking up another 28% in the company. Databank also managed the bid by Ventures and Acquisitions, a firm with local and international partners, to buy the 40% interest in Exchange & Enterprise Insurance that had been held by Guardian Royal Exchange; a tender offer then increased the stake to 52%. Databank also helped brewer Heineken to buy a controlling interest in Kumase Brewery and is now arranging the merger of Kumase and ABC Breweries.
Kenya
Best bank: Barclays
Best foreign bank: Citibank
Best securities firm: Kestrel Capital
In Kenya, competition between the leading banks has intensified. But despite the strong performances of Kenya Commercial Bank – achieved despite problems which led to the departure of several senior managers – and Commercial Bank of Africa, the best bank award goes to Barclays. Barclays has a highly visible senior management and a national presence which enables it to reach a wide range of customers and offer full corporate and retail banking services.
Last year Barclays’ profits rose to Ksh4.2 billion ($69 million) from Ksh3.7 billion, making it Kenya’s most profitable bank. In the past year Barclays has introduced a more focused strategy for its previously dispersed corporate banking department and has upgraded retail-banking services by refurbishing branches.
Citibank remains the leading foreign bank though it is now facing tougher competition from other institutions including Dutch bank ABN-Amro and French bank Paribas. But Citibank, the country’s fourth-largest bank, is still the most innovative, developing the treasury bill and bond markets for both foreign and local investors. It was also a pioneer in developing on-line automated payment products and provides clients with a full range of services in equity, foreign exchange and trade finance.
Kestrel Capital narrowly retains its position as Kenya’s best broker. Its research is outstanding and its domination of the international business gives it an edge over rivals that are stronger with local investors.
Kestrel recently acted as lead broker for the highly successful flotation of Kenya Commercial Bank, producing more demand than all the other brokers involved in the exercise combined. It performed the same service on the flotation of Kenya Breweries. The company has also become the country’s leading bond broker.
Morocco
Best bank: Banque Marocaine du Commerce Extérieur
Best foreign bank: Citibank Maghreb
Best securities firm: Casablanca Finance and Intermediation
Banque Marocaine du Commerce Extérieur is one of the three largest banks in Morocco and the only one to have been privatized (in 1995). Its two main competitors are Banque Centrale Populaire and Banque Commerciale du Maroc. Its strong credit rating, constrained only by Morocco’s sovereign ceiling, is a reflection of the support of its key shareholders, the Benjelloum Group (one of Morocco’s leading family-owned businesses), Commerzbank and Nomura.
Banque Marocaine du Commerce Extérieur is a leader in the retail and corporate-lending markets as well as in trade finance and it is in the process of setting up a new investment bank, BMCE Capital, which includes a brokerage arm in order to expand its capital-market activities. The bank is in the middle of a complete reorganization that it hopes will push profits up further and make it the only bank in Morocco with a truly modern infrastructure.
In Morocco Citibank is the largest and most profitable of the foreign banks and has been expanding its services by introducing ATMs and Visa and MasterCard. It is the only financial institution in the country which offers on-line and remote-access banking. The bank is the leading export financier for the phosphate industry and has won the mandate for the import finance of Fiat cars from Italy. It is also the leading custodian for foreign clients.
Casablanca Finance and Intermediation has maintained its position as best broker largely because it is the best connected. It is a pioneer in the country’s embryonic mergers and acquisitions industry, as well as a leader in asset management and the distribution of debt and equity issues. Its research is highly regarded.
Nigeria
Best bank: Nigeria International Bank
Best foreign bank: Citibank
Nigeria has proved one of the most difficult markets to operate in this year. Thirty banks have closed and 30 more are likely to. Nigeria International Bank, which is 75% owned by Citibank, is only the fifth largest but is the most profitable. The competition is likely to get tougher in the coming year from well-managed but still small institutions such as Zenith and Guarantee Trust Bank.
Citibank, which raised its stake when other international banks were deserting the country, is still the leading bank in terms of innovation, automation and service. It dominates corporate business with customers from the local as well as international market. It has also taken the lead in developing electronic banking and has built on its position as the leader in foreign exchange dealing while playing an increasingly active role in the capital market.
South Africa
Best bank: Standard Bank
Best securities firm: Investec
Standard Bank is the country’s largest in terms of total assets and profits and has responded most effectively to the challenge from the many international banks that have returned to the Republic. It has not only developed a wide range of products for its domestic customers but sought to expand its operations in Africa and in both western and eastern Europe. Standard offers the full range of retail, commercial and corporate banking services in South Africa and its international division offers trade finance through its branches in most African countries, Hong Kong, Taipei, London, New York and the Isle of Man. The bank’s subsidiary SCMB is one of the largest asset managers in South Africa.
Investec is the largest private-banking and investment-banking group with a market capitalization of more than R20 billion ($3.9 billion). It has built a reputation on technical competence, an owner-manager culture and a capacity to surprise the market. The quality of its research wins it more deals than some larger, more internationally renowned advisers. Its international ambitions were demonstrated recently by the purchase of Guinness Mahon from the Bank of Yokohama and its offer for Hambros, the holding company of the London-based financial services group.
Tunisia
Best bank: Banque Internationale Arabe de Tunisie
Best foreign bank: Citibank
Best securities firm: Tunisie Valeur
Competition has increased sharply in Tunisian banking. The country’s state-owned banks are being privatized and the remaining public-sector institutions are being run more efficiently and are placing more emphasis on devising services for the private sector. Banque Internationale Arabe de Tunisie, the third-largest bank overall and the largest in the private sector, has moved aggressively into the retail sector. It has also issued its own global depositary receipt, the first for a Tunisian issuer.
Citibank is the only bank to have been issued with both offshore and onshore licences. It has made inroads into local business, launching a cash-management service that has enabled it to expand its corporate client base. It still has one of the biggest foreign-exchange businesses in the country.
Tunisie Valeur is widely regarded as the only local broker worth considering by foreign investors. It has concentrated on attracting overseas investment flows through a variety of innovative funds and provides the best research. It has been responsible for the first initial public offering of any significance in Tunisia for several years, for El-Mazraa, a poultry business that it bought and later took to the stock market.
Zimbabwe
Best bank: National Merchant Bank
Best foreign bank: Barclays Merchant Bank Zimbabwe
Best securities firm: Flemings Edwards
National Merchant Bank has retained its position as Zimbabwe’s best bank. After a successful flotation on the London and Harare stock exchanges it has seen off tough competition from First Merchant Bank. National Merchant Bank has been innovative and aggressive, taking significant market share in financing the oil sector, once a First Merchant Bank monopoly.
The local brokerage market in Zimbabwe is dominated by Sagit and Flemings Edwards. The latter gains the edge this year because the introduction of Flemings as a principal shareholder in the past year should give the firm competitive advantages. The quality of its research has also received high praise from investors.
Barclays Merchant Bank Zimbabwe is the best foreign bank in the country. In the past year it has set up a regional satellite-based payments-processing system, enabling it to be the first bank in the country to offer real-time banking.
On the retail side Barclays has launched prestige banking units to cater for high-net-worth clients and it has relaunched its corporate business. The merchant bank has increased its capital base and now offers an integrated corporate service. Among its successes was its appointment as lead manager for the Dairy Board privatization. Nigel Dudley
