Four Nigerian-owned banks were named among the best banks in Africa last year, according to the latest World’s Best Banks 2024 report.
The report published by Global Finance, a monthly financial magazine shows that UBA, GTBank, Access Bank and Zenith Bank in Burkina Faso and Sierra Leone, Gambia, Ghana and Nigeria respectively made the list.
“Banks in Africa have been operating in difficult environments recently due to the economic turmoil. The stress factor is particularly high in large economies. Amidst the harsh environment, the top leadership and management of African banks have shown acumen and fortitude,” the report said.
He said that instead of collapsing, banks remain resilient. Some are even posting record profits, and local currency crises in Egypt and Nigeria have wreaked havoc.
“The ripple effects for banks have increased risks to asset quality. In South Africa, sluggishness in critical sectors such as mining, energy, logistics, construction and trade has seen economic growth slip to just 0.6% in 2023, from 1.9% in 2022.”
According to Global Finance, Standard Bank, its regional winner, led the pack with a 27 percent rise in central profit to $2.3 billion from $1.7 billion, while return on equity rose to 18.8 percent from 16.3 percent.
He reported that Zenith Bank defied Nigeria’s financial chaos to record triple digit profit growth. “In the third quarter of last year, it saw a 149 percent increase to $368.4 million in pre-tax profit from $146.3 million for the same period in 2022.”
The report added that UBA, the winner in Burkina Faso and Sierra Leone, believes that the Economic Community of West African States (ECOWAS) is a critical foundation for development and that in February, the bank was a key supporter and official sponsor of ECOWAS Mining and Petroleum Forum.
“Ironically, Burkina Faso joined Mali and Niger to form a separate alliance and left the bloc, to which it contributed about 8% of GDP. The country, along with Niger, also plans to leave the West African Economic and Monetary Union, whose members use the CFA franc, which is pegged to the euro. These developments pose huge threats to UBA.”
The bank is building a strategy around cross-border payments, remittances and trade finance in the country. Everything is linked to joining the two economic and monetary groups. Despite worsening political risks, UBA in Burkina Faso is determined to continue, the authors of the banking report said.
“GTBank is our winner as Best Bank in The Gambia. The bank is not only using its extensive branch network to forge partnerships with public bodies to collect revenue, but is also developing digital channels to increase retail market penetration,” they said.
They noted that Ghana’s economy is showing signs of stabilization after a turbulent period. “For Access Bank, the country’s winner, the effects are already being felt, with net profit rising 47.1% in the third quarter to $34.4 million, from $23.3 million in the same period in 2022” .