South Africa’s richest banks

South Africa’s financial institutions once again top the list for the African continent in The Banker’s Top 1,000 Banks global rankings.

TheBanker.com’s 2014 list shows that South Africa’s big three banks lead the rest of the African continent for profitability.

Standard Bank tops the list in Africa with Tier 1 capital of $10.57 billion and pre-tax earnings of $2.9 billion. However, despite its top position, the bank slipped in the global rankings from 109th in 2013, to 116th in 2014.

FirstRand (Including FNB) ranks second (152nd overall) with $7.83 billion in capital, while Nedbank ranks third (195th overall) with $5.11 billion.

In 2013, the “big four” took the top for spots in the African list, but Absa as an individual bank has dropped off, as it now forms a complete part of the Barclays group. Absa would have been placed 3rd, ahead of Nedbank.

Absa (Barclays Africa) has $5.9 billion in capital, according to The Banker.

“South Africa’s banking sector, Africa’s largest in terms of Tier 1 capital and assets, has endured yet another tough year,” The Banker reported.

“With the exception of FirstRand, all six of its lenders in Africa’s top 25 ranking experienced falls in their dollar-denominated Tier 1 capital, reflecting the country’s weak economic growth and the heavy depreciation of the rand, which lost 17% of its value versus the US currency in 2013.”

Other South African banks which cracked the top 25 banks in Africa include Investec – ranked 7th (320th overall) – with capital of $2.64 billion; Capitec in 18th (678th overall) with capital of $882 million; and African Bank at 22nd (754th overall) with capital of $732 million.

Top 25 African banks ($m)

# Bank Country Tier 1 Capital
116 Standard Bank Group South Africa 10,566
152 FirstRand South Africa 7,825
195 Nedbank Group South Africa 5,110
240 Group Banques Populaire Morocco 3,804
259 Attijariwafa Bank Morocco 3,509
293 Zenith Bank Nigeria 3,114
320 Investec South Africa South Africa 2,642
396 Ecobank Transnational Togo 2,051
404 National Bank of Egypt Egypt 1,994
407 BMCE Bank Group Morocco 1,981
412 Banque Misr Egypt 1,968
415 Quaranty Trust Bank Nigeria 1,955
424 First Bank of Nigeria Nigeria 1,865
532 Access Bank Nigeria 1,267
535 CIB Egypt Egypt 1,258
539 United Bank for Africa Nigeria 1,249
622 Fidelity Bank Nigeria 1,004
678 Capitec Bank Holdings South Africa 882
679 Bancode Poupancae Credito Angola 881
691 Mauritius Commercial Bank Mauritius 856
747 Skye Bank Nigeria 740
754 African Bank South Africa 732
762 Banco Angolanode Investimentos Angola 720
769 First City Monument Bank Nigeria 708
785 Banco BIC Angola 681

In terms of profit generation, African banks make the highest returns on capital of 24% – double the average return for the rest of the globe and far exceeding average returns of only 4% in Europe.

“This is despite African banks holding less than 1% of global capital,” The Banker said.

Globally, China’s banks moved up the rankings to supplant US banks in first and second biggest banks in the world by capital.

ICBC is ranked as the world’s biggest bank with $207.6 billion in tier 1 capital, while China Construction Bank ($174 billion) climbed from 5th position in 2013 to second in 2014.

Last year’s number 2 – JP Morgan Chase – was subsequently pushed to third with capital of $165.7 billion.

“Chinese banks now account for a third of total world banking profits, outstripping the USA (20% of profits) and contributing to the largest ever annual profits for the global banking sector of $920 billion – 23% higher than the previous year,” The Banker said.

“This is the first time since before the financial crisis that we have seen such a large annual increase in global banking profits. Apart from China’s contribution US banks are also doing well and have recovered much faster from the crisis than European banks.”

Top 10 global banks ($m)

# Bank Country Tier 1 Capital
1 ICBC China 207,614
2 China Construction Bank China 173,992
3 JP Morgan Chase & Co US 165,663
4 Bank of America US 161,456
5 HSBC Holdings UK 158,155
6 Citigroup US 149,804
7 Bank of China China 149,729
8 Wells Fargo & Co US 140,735
9 Agricultural Bank of China China 134,410
10 Mitsubishi UFJ Financial Group Japan 117,206

The Banker’s Top 1000 World Banks ranking tracks the largest bank holding companies based on Tier 1 capital. The group analysed close to 2000 financial results in order to produce the Top 1000 for 2014.

Tier 1 capital is the core measure of a bank’s financial strength, composed of core capital, which consists primarily of common stock and disclosed reserves.

This year’s minimum Tier 1 capital for inclusion was $391 million, the group noted – compared with the $342 million last year (a 14.5% increase).

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South Africa’s richest banks