Tom MinneyAlthough regional economies have been hard hit, Kenya and other countries have seen the benefits of accommodative monetary policies as part of the emergency response by policy-makers and central banks. Recovery is expected during 2021, with Kenya bouncing back fastest, although held back by ongoing precautionary restrictions.
The pandemic has also advanced digitisation. The Central Bank of Kenya’s annual report 2019/20 says 67% of banking transactions were conducted on mobile phones, compared to 55% of transactions before the pandemic. Early in the pandemic the Central Bank rate, a key interest rate, was cut from 8.25% to 7%.
Kenya’s dynamic Equity Bank has climbed three places in our survey of Africa’s Top 100 Banks in 2021 to #24 and increased tier 1 capital by 27% to $1.4bn to take the top place in our East African ranking from Ethiopia’s state-run Commercial Bank of Ethiopia (CBE).
Equity is expanding its regional reach, including increasing its stake in Equity Bank Congo in the Democratic Republic of Congo (DRC) to 94% of the total shares in May 2021. It bought a majority of Banque Commerciale du Congo in August 2020 to form the country’s second biggest bank. CEO James Mwangi said he expects DRC will drive Equity’s growth in coming years.
CBE’s tier 1 capital is down 33% to $1.2bn and it has fallen from #17 to #26. Part of this is due to faster depreciation of the birr than the Kenyan shilling against the US dollar. CBE retains top profitability with 24% ROE.
Kenya Commercial Bank (KCB) has also slipped from #25 to #29 with tier 1 capital down 6% to $1.1bn, although this is mostly due to 8% depreciation in the Kenyan shilling versus the dollar. KCB has made an offer to shareholders in Banque Populaire du Rwanda (BPR) to raise its acquisition stake from 62% to 100%. It plans to spend $57m on buying stakes in BPR and African Banking Corporation Tanzania.
Kenyan banks make up regional rankings #4 to #7. Tanzania’s highest ranked bank is the National Microfinance Bank, creeping up the overall ranking from #67 to #64 and to #8 in the region with capital of $397m. Rwanda’s Bank of Kigali is back in the top 100, after dropping out last year, although tier 1 capital fell 1% to $224m.
Sudan had two banks in the Top 100 in 2019 but has fallen out of the top ranking in recent years, partly linked to decline in the Sudan pound against the dollar.
The transitional government, led by prime minister and economist Abdalla Hamdok, has been working hard to open up, reintegrate and digitise the economy after 27 years of US sanctions ended in 2020. In July 2021 the IMF announced a $1.5bn loan and $50bn of relief for Sudan’s external debt.
The Top 100 Banks survey ranks the banks according to their Tier 1 capital. This consists of: capital + reserves + retained earnings + minority interests. These are published in local currencies and then converted into US dollars at the exchange rates at the year-end date in the results (or on 31 December 2020), so changing FX rates can affect the ranking.
No comments :
Post a Comment