African Awards for Excellence 2011: By country
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African Awards for Excellence 2011: By country

Awards for Excellence 2011 
Regional Awards for Excellence 2011: Africa 
All regions and countries 

African winners by country
  South Africa


Best bank: Banco Millennium Angola  

Angola remains an extremely difficult country in which to operate as a bank. But there is big potential for growth, and basic advances in the banking sector go a long way.

Banco Millennium Angola (BMA), part of BCP, Portugal’s biggest bank, is using innovative construction techniques to extend its network. Its branch numbers increased from 25 to 40 over the year and customers numbers were up.

In 2010 the bank made a $4 million investment in a new data centre and put in place a new back-up system better adapted to the challenging local environment. It improved risk management systems and brought central services from four disparate locations into a single head office. It introduced loan and savings products for poorer sections of society, public employees and students.

During the review period BMA’s profit increased by 42% to $35 million. Total deposits increased 35% to $850 million. Net loans increased 33% to $620 million. A worthy winner of best bank in Angola.

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Best bank: Barclays bank of Botswana

Botswana’s second-oldest bank and the one with the most extensive branch network, Barclays Bank of Botswana, had another successful year, growing profit before tax by 11% to just under $100 million in 2010, to take the best bank accolade.

During the year, Barclays was the receiving bank for the local IPO of Botswana Development Corporation, the government’s investment arm, which raised $60 million. It was also receiving bank for the IPO of Cresta Marakanelo Hotel, the biggest hotel group, which raised $15 million.

The bank relaunched its vehicle finance division, introduced mobile-phone banking (allowing transfers and balance enquiries), and launched the newly branded Barclays Premier League Current Account, drawing on a local following for English football.

Although it is not a bank, Botswana’s biggest consumer loans company, Letshego, goes from strength to strength, with profit growth of 25% in 2010.

Letshego is expanding regionally but the bulk of the firm’s lending remains in Botswana. In absolute terms, while its profit is not as large as Barclays’, Letshego now makes more money than some incumbent lenders.

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Best bank: Ecobank Ghana

With its incipient petro-boom, it is too early to tell whether Ghana, like so many oil-rich states before it, will succumb to the new-resource curse of decreasing accountability in governance and declining overall export competitiveness. But Ecobank Ghana has been an important constituent of the growing local banking sector.

Ecobank Ghana’s financial performance has been a blessing for the firm’s shareholders too. In 2010, its profit before tax were up 25%, its deposits increased 21% and its loans increased 9%.

For example, Ecobank launched an instant mobile-phone money transfer service in Ghana this year with telecoms firm Ghana Airtel. In partnership with the Bill and Melinda Gates Foundation, Ecobank’s joint venture with US microfinance group Accion, called EB Accion, launched a new savings product, bringing banking terminals closer to unbanked sections of Ghanaian society.

Ecobank helped the country’s only oil refinery recover after production almost stopped over unpaid debts of $600 million to Ghana Commercial Bank. Ecobank was lead adviser to the government on the restructuring. The bank continues to play a key role in financing the refinery’s oil imports from Nigeria.

As part of the agreement signed between Ecobank group and Bank of China, Ecobank Ghana became the first Ecobank affiliate to launch a China trade desk, manned by representatives from Bank of China, to help service Chinese companies operating in Ghana.

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Best bank: Equity Bank

With GDP growth touching 5%, Kenyan banks are growing loans and deposits at between 20% and 30% on average. Asset quality is generally improving, and local franchises such as Kenya Commercial Bank (KCB) are performing particularly well.

KCB’s profit grew 47% in 2010. Its non-performing loan ratio, while still over 10%, is gradually declining. Its recently developed sub-regional operations are beginning to turn profitable.

But it is Equity Bank that is the winner of best bank.

It has only come to prominence in the past decade, growing rapidly and organically, and focusing on the mass market and small businesses, particularly in rural areas. It is a model particularly suited to a region where agricultural livelihoods and informal employment remain vitally important to the economy.

Equity Bank has made a name for itself with innovations such as using agricultural produce such as milk as collateral. Like KCB, Equity Bank is expanding in the rest of East Africa.

In 2010, Equity Bank’s non-performing loans, already several percentage points lower than KCB’s, declined further still. Its net profit grew just over 60% in 2010 and in the first quarter of this year it was 30% higher a year earlier. From March 2010 to March 2011, the bank’s lending grew 27% and its customer deposits 38%.

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Best bank: Attijariwafa

Morocco has been largely saved from the political disruption to its economy of the kind experienced elsewhere in North Africa. Economic growth is accelerating, despite reliance on oil imports.

Morocco’s banks have been adept at keeping a lid on their exposure to luxury developments in hotspots such as Marrakesh and Tangier, which are struggling to find buyers. But 2011 promises to be more difficult for the banks’ previously profitable Africa-focused international operations: above all in Tunisia and in Côte d’Ivoire, after the political troubles in those countries.

In 2010, BMCE, Morocco’s second-biggest bank, posted a rebound in profits of 113% after having halved in 2009. Morocco’s biggest bank, Attijariwafa posted 26.2% profit growth that year. In 2010, Attijariwafa’s profit growth continued to rise, despite the challenging environment, growing 4% to just over $500 million (about 70% higher than BMCE’s profit). It is the winner of Euromoney’s best bank.

Attijariwafa has continued its international expansion, especially in francophone Africa, integrating existing acquisitions there, taking control of BNP Paribas’ Mauritania business, and launching operations in Burkina Faso. The bank’s total branch network in Morocco and abroad rose 14% to over 2,000.

While maintaining a healthy loan-to-deposit ratio of just over 80%, the bank’s lending rose 9.5% and its deposits rose 7%.

Attijariwafa made strides in investment banking too, acting as coordinator and bookrunner on innovative deals in debt and equity capital markets, and advising on important M&A transactions.

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Best bank: Guaranty Trust Bank
Best investment bank: Stanbic IBTC

With the establishment this year of a state firm to buy bad debt from local lenders, Nigerian banks are well into recovery after the nation’s banking crisis two years ago.

First Bank of Nigeria, for example, has embarked on an ambitious new growth strategy, following advice from US consultancy McKinsey. First Bank posted impressive profit growth in 2010, although this was following a quadrupling in bad debt and a 75% drop in profit in the upheaval.

First Bank is Nigeria’s biggest bank by assets and loans. If its new strategy is successful, it will be good news for Nigeria. The bank has a history stretching back more than 100 years.

But that is not enough to win best bank. That honour goes to Guaranty Trust Bank. GTB is only 20 years old and is the flagship of the sector, employing up-to-date banking practices and technology to grow organically into one of the country’s five biggest banks. With its London share listing, GTB remains the firm favourite in terms of transparency, corporate governance, risk management and consistency of profitability.

GTB’s profit continued to grow during the local banking crisis. In 2010, its net profit was up 60% at $320 million, while in the first quarter of 2011 its profit again rose by 50% year on year. Lending rose 5% and deposits were up 10% in 2010. At just under 20% it has the highest return on equity of the top-10 Nigerian banks: more than twice as high as the average. At 6.2% its non-performing loan ratio is also well below average, while its capital adequacy ratio is healthy at 25.5%.

Similarly, a new generation of Nigerian investment banks is emerging – firms such as Chapel Hill, which is advising the central bank on the reform and stabilization of the banking sector, alongside Deutsche Bank, and Stanbic IBTC, the local affiliate of South Africa’s Standard Bank. 

In Dealogic’s ranking for Nigeria for the period April 1 2010 to March 31 2011, Stanbic IBTC is the only firm to achieve a top-five position for debt, equity and M&A. It is particularly strong in debt, acting as lead bookrunner, for example, on the N15 billion ($100 million) five-year debut bond for UACN Property Development Company.

The bank acted as joint lead manager on a N20 billion seven-year debut bond for UBA, one of Nigeria’s biggest and oldest banks. Stanbic IBTC reckons this was the first tier-2 bond issue in the local market.

Stanbic IBTC was further joint bookrunner on a N57.5 billion seven-year bond for Lagos State, perhaps the largest sub-sovereign bond ever in Nigeria. Later in 2010 it underwrote a N50 billion bond for Bayelsa state and a N17 billion bond for Ebonyi state.

In M&A, Stanbic IBTC acted as financial adviser to Benue Cement on its $13.9 billion merger with Dangote Cement, precluding a listing in London.

In equity, the firm acted as joint bookrunner on the $140 million further offering in Nigeria and Johannesburg for local energy firm Oando.

As well as arranging a number of syndicated loans for acquisitions and property developments for various local clients, Stanbic IBTC arranged and structured financings for a pipeline and a sugar refinery.

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South Africa

Best bank: Firstrand Bank
Best debt house: ABSA Capital
Best equity house: Morgan Stanley
Best M&A house: Goldman Sachs

‘Post-growth’ is how pessimistic analysts describe South Africa’s banking sector. Indeed, the middle-to-top section of South Africa’s population is as saturated with debt as a developed market, leaving a sophisticated mortgage industry to recoup.

As a result, aside from expanding elsewhere in sub-Saharan Africa (where economic growth rates are higher) South African banks are waking up to the opportunities presented by South Africa’s poor and unbanked as demonstrated by the success of firms such as Capitec Bank.

South Africa’s best bank, First National Bank (FNB), the retail and commercial arm of FirstRand Bank, is building around eight cut-price branches a month in low-income areas. The firm also more than doubled the number of customers using its mobile-banking service during the period.

FirstRand’s expansion on the rest of the continent continued during the period with, among other developments, the approval of a licence in Tanzania.

FirstRand far surpassed its larger rivals, Standard Bank and Absa, in financial performance: it registered 40% profit growth in 2010. Return on equity rose to almost 20%.

In the second half of 2010, FNB’s pre-tax profit rose 16%. Its loans and advances grew 3% and deposits increased 8%. FirstRand’s vehicle finance arm, Wesbank, more than doubled its income before tax. The group’s other main division, Rand Merchant Bank (RMB) – already one of the leading local investment banks – grew income before tax by 48%.

RMB acted in some of the most important debt, equity and M&A transactions of the year. Among its most impressive work was arranging European Investment Bank-assisted financing of $148 million for the upgrade of water supply infrastructure in Durban. RMB also boosted its pan-Africa team. Overall, however, other investment banks shone more brightly – although none dominated across all products.

In debt, Absa Capital wins the laurels for topping the Dealogic ranking for South Africa from April 1 to March 31, with almost twice the volume and more than twice the number of deals of JPMorgan, which was ranked second. Absa Capital’s deals spanned the public and private sectors, high yield and investment grade, and local-currency and foreign-currency markets.

Absa Capital was bookrunner on bonds including miner AngloGold Ashanti’s 10-year and – most impressively – 30-year notes, totalling $1 billion. It helped bring media firm Naspers to the international debt market for the first time, with a $700 million seven-year deal. It also led debut 144a/RegS bonds for parastatals Eskom (electricity) and Transet (transport). Eskom’s $1.75 billion bond was its first international issuance since 2006 and one of the largest non-sovereign dollar bonds from South Africa.

In local currency, it brought the South African division of BMW to the bond market for the first time, with a deal for the equivalent of $370 million. It also helped local industrial firm Barloworld extend its debt maturities and reprice at a lower coupon with new three-, four- and seven-year bonds, totalling the equivalent of $150 million. Absa Capital was also sole arranger of three high-yield bonds, including local luggage retailer Brandcorp’s $110 million deal.

In equity, Morgan Stanley tops the Dealogic ranking by a long way, with the highest number of deals and more than twice the volume of its nearest rival, UBS. Our winner benefits from a joint venture with RMB in sales and trading of Johannesburg-listed equity and equity-linked securities.

Morgan Stanley acted as joint global coordinator and bookrunner on the $432 million IPO of black-empowered mid-tier miner Royal Bafokeng Platinum and the $686 million IPO of Life Healthcare, one of South Africa’s largest private-sector hospital operators.

It was also one of two bookrunners and stabilization agents on a $1.6 billion concurrent equity and mandatory convertible offering from AngloGold Ashanti. In addition, Morgan Stanley acted as bookrunner on the accelerated bookbuild offerings for 11.8% of the equity in local packaging firm Nampak and 1.3% of the equity in FirstRand Limited, FirstRand Bank’s holding company.

Goldman Sachs has advised on a large proportion of the seminal M&A deals in South Africa’s post-apartheid history. This year it continued that trend, not least through its advisory work on US firm Wal-Mart’s $2.3 billion takeover of South African retailer Massmart – as well as on steel firm ArcelorMittal South Africa’s $1.3 billion Black Economic Empowerment deal with employees and the Ayigobi Consortium.

In 2010, Goldman Sachs advised on the $400 million equity investment into Russian internet company Digital Sky Technologies (DST) by South African media firm Naspers – part of Naspers’ strategy of expanding in emerging markets. In addition to the cash payment, Naspers relinquished its 40% stake in email service, which it previously co-owned with DST. Naspers gained a 30% stake in DST through its subsidiary Myriad International Holdings.

Goldman Sachs advised Johannesburg-listed miner Anglo American in its $1.34 billion sale of zinc assets in South Africa, Namibia, and Ireland to Indian billionaire Anil Agarwal’s Vedanta Resources. Lastly, it advised Canadian energy firm Talisman on its $1 billion sale of a 50% stake in British Columbia shale natural gas assets to South African energy and petrochemicals firm Sasol.

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Best bank: Standard Chartered

Improvements to the Africa commercial banking operations of Standard Chartered are particularly evident in Tanzania.

Euromoney’s best bank delivered a particularly strong performance in 2010 and the momentum continued in 2011, with 40% year-on-year profit growth in the first quarter.

In 2010, total revenues increased by 5%, with profit before tax reaching the equivalent of $18 million. Its asset growth of 26% far outpaced the market. Non-performing loans dropped from 7% to 5% of the loan book, well below the market average.

During the year Standard Chartered bought and integrated the Tanzanian custody operation of Barclays (part of Standard Chartered’s wider deal to buy the custody business of Barclays Africa). Standard Chartered also upgraded its electronic branch-banking system in Tanzania, improving transaction speeds.

In August 2010, Standard Chartered Tanzania recalled its own TSh8 billion ($5 million) 2015 bond (issued in 2005), replacing it with an oversubscribed TSh10 billion bond. The bank again helped the local capital market by arranging a $10 million local-currency bond, backed by USAID, for the Tanzanian operation of Ugandan micro-financier Pride.

The bank launched new retail products in Tanzania, including a current account to encourage saving, where customers only pay for the transactions they use.

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Best bank: Zambia National Commercial Bank

Mining is thriving in Zambia – in large part thanks to foreign investment from China and other resource-hungry nations. But some of the challenges are evident in the structure of the banking sector. The biggest banks in the country by assets and deposits are Standard Chartered, Barclays, Zambia National Commercial Bank (Zanaco), Stanbic (part of South Africa’s Standard Bank) and Bank of China.

Bank of China has more branches even than Stanbic and Barclays, but in terms of loans and advances, it is not even in the top 10. Zanaco ranks as the biggest bank in terms of loans and advances. It also has the biggest branch network.

Every year since its privatization in 2007, Zanaco’s profit and lending have increased. In 2010, Zanaco’s profit was almost three times bigger than in 2005, and its loan book was around eight times larger.

The bank has focused on developing its franchise in rural and semi-rural areas, increasing branches and ATMs, and introducing new services such as mobile branches on trucks and mobile-phone banking. In 2010, total income was up 14%. The NPL ratio declined, and profit before tax was up 37%. Its return on shareholders’ funds was up 24% (Dutch agriculture-focused lender Rabobank owns 45.6%; the government retains 25%; 26% is listed on the local exchange).

This year the firm participated in an $11 million debt-for-equity swap for Northern Coffee Corporation, helping rescue the country’s biggest coffee firm.

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