The same two Ugandan banks made two rankings of Africa’s top 100 banks in 2023 published last week, with both improving their position in one ranking, while the other list welcomed a second Ugandan lender this year.
Stanbic Bank Uganda and Centenary Bank both made the annual lists published by The Banker, a Financial Times publication, and African Business, a London-based business magazine. However, Centenary Bank is a new entrant to the African Business ranking.
The two banks are also among the top ten on the continent in terms of core profitability, according to one of the lists.
Both publications rank banks according to their Tier 1 capital, the stronger of two regulatory capital requirements that act as a buffer against expected losses. Tier 1 capital includes common shares, stock surplus, retained earnings, other comprehensive income, qualifying minority interest, and certain other securities as defined by the regulators.
The lists diverged on the consistency of their data. The Banker’s assessment ticked all boxes; it was based on financial statements for the 2022 financial year. African Business was less consistent; some of its data is from 2021, such as that of the two Egyptian banks it ranked second and third, and which The Banker excluded because they had not yet published their 2022 results. African Business also used Centenary Bank’s 2021 results, while The Banker used last year’s results.
This website will rely heavily on The Banker’s ranking since it enables both a comparison of last year’s performance and analysis of future trends. Conclusions regarding the stability and performance of Stanbic Bank and Centenary Bank will only hold true if data from the same period is compared, rather than contrasting data from two separate periods.
Nearly half of the banks in this year’s The Banker ranking reported a fall in Tier 1 capital, the publication said, following a decline in their asset and capital bases caused by weak currencies. However, 70 per cent reported an increase in pre-tax profits, reflecting improved economic conditions as the impact of Covid-19 recedes.
Stanbic Bank ranks 60th on The Banker’s list, up from 73rd last year, while Centenary Bank rose from 95th to 78th. In the African Business ranking, Stanbic Bank jumped 28 places to 70th, while Centenary Bank made it to 92nd place as a new entrant.
According to The Banker, Stanbic’s Tier 1 capital rose 2.3 per cent to $368mn in 2022, while Centenary Bank’s Tier 1 capital increased by 11.2 per cent to $263mn. African Business puts Stanbic’s Tier 1 capital at $367mn – essentially the same figure as The Banker – while Centenary Bank’s is listed at $251mn, although this is based on its 2021 earnings report.
South Africa has four banks in the top ten of both rankings, more than any other nation. It takes the top four spots in The Banker’s list, led by Standard Bank Group, whose Tier 1 capital is reported at $11.7bn. Standard Bank also tops the African Business ranking, followed by two Egyptian banks in second and third place.
After South Africa, lenders from North African countries dominate the top ten of both rankings, although Nigeria’s Zenith Bank managed to come tenth in The Banker’s ranking.
Egypt dominates the Financial Times ranking with 15 banks, followed by Nigeria with 11, Kenya and Tunisia with nine each, Morocco with eight, and South Africa and Mauritius with seven each. Morocco and South Africa also have all their banks ranking in the top 50.
Profitability
Ugandan banks excel in profitability, which The Banker measures by return on assets (ROA). The metric reflects the efficiency of a bank’s management in generating income from its assets, and is considered a better indicator of financial stability than, for example, return on equity, because it excludes the impact of debt on earnings.
Centenary Bank has the fourth highest return on assets ratio of 4.4 per cent in The Banker’s ranking, while Stanbic Bank Uganda is seventh, with an ROA of 4.05 per cent. The top two lenders are both from Angola — Standard Bank de Angola and Banco de Fomento Angola — with ROAs of 6.07 per cent and 5.18 per cent respectively.
South Africa’s Capitec Bank Holdings ranks third with an ROA of 5.06 per cent, while Standard Bank Mozambique completes the top five with a ratio of 4.34 per cent.
The other top ten positions are occupied by Mozambican banks – BCI in eighth place with an ROA of 4.01 per cent and Millennium Bank Mozambique in tenth place with a ratio of 3.44 per cent; Tanzania’s National Microfinance Bank (4.22 per cent) in sixth place; and the Cooperative Bank of Kenya in ninth place with an ROA of 3.63 per cent.
In terms of assets, the two Ugandan banks are in the bottom fifth of the table. Stanbic Bank – Uganda’s biggest bank by assets – is ranked 84th with assets of $2.4bn, while Centenary Bank is ranked 97th with assets of $1.5bn.
The four largest banks by assets on the continent are all from South Africa, with the Standard Bank Group leading the way, followed by three banks from Morocco, another South African lender, and one each from Nigeria and Togo in the top ten.
To complete the top twenty, Nigeria adds four banks (12th, 14th, 15th and 18th), the same number as Egypt (11th, 13th, 16th, 20th), while Mauritius (17th) and Morocco (19th) each contribute one bank. The largest East African banks are Kenya’s KCB Group, ranked 21st, and Equity Bank, one position lower.
