African banks gave highest returns on capital in 2013: The Banker
The report also shows that 31 banks in Africa yielded the highest returns to shareholders in 2013 and features State Bank of Mauritius (SBM) among the top 5. (Image: Grand Baie)
The Banker magazine released its 2014 Top 1000 Banks ranking last week which showed that African banks offered the highest return on capital of 24% in 2013.
This was double the average return for the rest of the globe and far exceeding average returns of only 4% in Europe, noted the report.
The report also shows that 31 banks in Africa yielded the highest returns to shareholders in 2013 and features State Bank of Mauritius (SBM) among the top 5.
The 31 African banks in the ranking hail from Nigeria, South Africa, Egypt, Angola, Gabon, Kenya, Mauritius, Morocco and Togo.
In Africa, Equity Bank of Kenya is placed first with a 54.68% Return on Capital (ROC), followed by Egypt’s National bank with 52.77% ROC.
CIB Egypt, ranked third, earned a 47.84% ROC while State Bank of Mauritius is ranked fourth with 40.49% returns and Kenya Commercial Bank (KCB) recorded 39.53% ROC to round up the top 5 in Africa.
Nigeria was one of the best performing countries in the continent with as many as eight slots in the 25 top banks in Africa, while United Bank for Africa starred as a Nigerian entry in the top 10 highest movers on the continent.
The Editor of The Banker, Brian Caplen, mentioned in the report summary that, in 2014, Chinese banks have further increased their strength in the ranking from last year, and are helping to push up global profits to record highs.
In the current report for 2013, they notched up the highest profits by any country, and the four largest Chinese banks are also the world’s four most profitable banks.
No surprise then that, in the ranking of top 10 countries with most profitable banks, China comes first with an aggregate pre-tax profit of $292,499 million for all its banks.
United States appears second in the ranking with an aggregate pre-tax profit of $183,242 million for its banks followed by Japan with aggregate pre-tax profit of $64,127 million from its banking sector.
Canada’s aggregate pre-tax profits for the banking sector are $39,248 million, consigning it to fourth place, while banks from France, Australia and Brazil raked in aggregate pre-tax profits of $38,633 million, $38,619 million and $26,100 million, garnering fifth, sixth and seventh place respectively.
Finally, banks from United Kingdom, Russia and India achieved aggregate pre-tax profits of $21,772 million, $21,659 million and $16,754 million respectively to round up the top 10 globally.
Concerning the top 5 biggest turnarounds, Spanish banks came first with an aggregate pre-tax profit of $12,720 million, followed by banks from Greece with $2,438 million, Irish banks notched -$3,972 million, and Belgian ones stood at $1,529 million while banks from Kazakhstan raked in a consolidated $996 million.
Brian Caplen’s comment on the Top 5 biggest turnarounds is that even if these banks are still losing money, they at least managed to reduce losses.
Among the top 10 loss making countries, Italian banks are at the top of the list with a loss of $35 billion as well as Portuguese and Irish banks both lost almost $4 billion each.
On the other hand, Spanish banks at least managed to turn last year’s catastrophic losses of $68 billion into a profit of $12 billion.
Finally, according to the Senior Editor of the magazine, Philip Alexander, banks in the 2014 ranking are stronger than ever because the level of capital held by banks continues to increase, with the minimum Tier 1 capital required to enter the Top 1000 World Banks now fast approaching $400 million.