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LATEST ARTICLES
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Two years on from the start of the revolution, regulatory and infrastructure problems remain a headache for Libya’s banking sector. The revolutionary hangover means the nation’s economic potential might not be realized for a long time to come.
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Qatar’s investment in VTB helps future deals between Russia and the Gulf, but relations will remain difficult.
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It is little wonder that GT Bank comes top in Euromoney’s survey of Africa’s best-managed banks. It was one of the first in Nigeria to implement international standards of accounting and issue international bonds and shares. CEO Segun Agbaje says there are only two of the original shareholders on the board. Agbaje, a long-standing employee, became the bank’s third CEO in 2011 after the second of the two founders to have been CEO, Tayo Aderinokun, died. Agbaje has already enjoyed the highest profit in Nigeria banking and the largest market capitalization – despite having the lowest total assets of the big five.
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Zenith is the biggest of the generation of Nigerian banks set up after 1990. By assets and market capitalization, it has risen to the second-biggest listed bank in the country – if largely thanks to the demise of Oceanic Bank and the recent sluggishness of UBA. Others attribute Zenith’s position partly to building branches in business districts, then deploying funds in liquid assets and loans to the safer local corporations. Indeed, in the next five years, CEO Godwin Emefiele says growing retail deposit share will remain a focus.
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The Sub-Saharan Africa survey is comprised of two parts: Best Sub-Saharan Africa research house and the Best managed companies in Sub-Saharan Africa.
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Along with First Bank, UBA is the other of the big five that is a descendant of a colonial-era bank: in this case, British and French Bank, which was converted to United Bank for Africa after independence in 1961. Former CEO Tony Elumelu’s Standard Trust Bank then acquired UBA in 2005. That heritage gives an important advantage: like First Bank, UBA’s branch network is one of the biggest in the country. Even if (like First Bank) some of these are legacy branches in less profitable rural areas, the network still gives UBA an outstanding base for cheap funding.
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More than any other of the big five – and in stark contrast to some banks in Lagos – the entry hall of Access’s headquarters has a welcoming and upbeat feel. It is, perhaps, partly because this is the newest institution to enter the top tier of Nigerian banks. Access’s ability to stay in the top five by assets will be largely dependent on the success of its acquisition last year of Intercontinental, which before the 2009 bailouts was Nigeria’s sixth-biggest bank. The fact that Access’s executives have been able to move into Intercontinental’s headquarters might be cause for hope.
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Union Bank’s headquarters is one of the tallest in Lagos, yet its age is showing. The contrast with the friendly and upbeat atmosphere at a bank such as Access is glaring.
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If Nigeria’s top five banks were the big-five African game animals, First Bank would undoubtedly be the elephant – the biggest. The brand even features an image of an elephant. CEO Bisi Onasanya acknowledges that his bank has always had a reputation, like the elephant, for strength and reliability. The relative trust First Bank enjoys is crucial in a country where depositors have learnt harsh lessons of banks with shorter histories. First Bank is the oldest bank in Nigeria – it was once part of Standard Chartered – and its branding trumpets a foundation date of 1894.
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The aftermath of the country’s margin-lending crisis and ensuing clean-up has given way to a rump of five big banks. So what differentiates them, and how will each fend off those determined to usurp them? Euromoney speaks to their CEOs in Lagos.
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Finance minister Nizar Baraka says he can – and must – bring down Morocco’s gaping fiscal deficit. But after a debut dollar bond in December, how much can he change the country’s financial model in the midst of pan-Arab revolt?
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All the roads on the approach to central Juba have been cordoned off. Heavily armed military personnel and police line the roads and prevent cars, motorbikes and pedestrians from completing their journeys. Frustrated and hot, many people who didn’t make the journey to work early enough are forced to return home. Others, mindful of short-tempered officials, try to edge their way forward, eager to catch a glimpse of the action ahead. Heightened security signals the arrival of Omar Bashir to town. This is the first time the president of Sudan has visited his neighbour in the south since independence on July 9 2011. In January 2012, South Sudan stopped transporting oil via Sudan as political tensions and a heated dispute over export fees escalated.
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Education is high on the agenda for some of the banks in South Sudan. Ivory Bank often makes national radio broadcasts on Friday mornings to educate people about their banking products. The South Sudan Micro Finance Development Facility gives grants and loans to microfinance institutions to help them reach potential borrowers. But the lack of human capital in South Sudan creates another barrier to a thriving banking environment. Government regulations state that all banks must employ at least 90% local people, but with only 27% of the population literate, it is difficult to hire the right expertise.
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Independent for just under two years, South Sudan still suffers from pervasive insecurity. Commercial banks have sprung up in the capital, selling themselves as a safe place for people to keep their money. But how are they making bumper profits when they are often little more than a place for deposits?
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Euromoney prides itself on having international reach, but it seems that there is one corner of the world that our reputation hasn’t stretched to. On a recent trip to South Sudan, the world’s newest country, a senior bank official at a local bank branch in Juba misinterpreted Euromoney’s request for an interview on the growth of the banking system there.
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Perish the thought: the US is seeking to sharpen personal liability against bankers falling foul of anti-money laundering laws, raising the spectre of bankers in jail. Financial institutions must urgently redouble their compliance efforts as recent lapses catapults the issue up the regulatory agenda.
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New fund to spread wealth locally; effort to boost local bourse.
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Stock market reaches all-time high; long-awaited Eurobond debut expected.
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The collapse in the price of gold has been accompanied by the realization that none of the normal rules for valuing gold is working, which could spell more weakness ahead for the yellow metal.
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Kenya’s debut and benchmark Eurobond is set to plug the deficit and to finance infrastructure, with analysts predicting that strong demand will offset any premium for political risk or fiscal laxity.
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With Euromoney’s Country Risk Survey showing improved assessments for much of the Americas and Japan during Q1 2013, it is tempting to believe that the increased global risks seen in recent years are finally abating.
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Possible easing in geopolitical tensions adds to near-term downside risks to Brent crude oil prices, but this does not change our bullish cyclical view, says BCA Research.
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Competition Board rules on rate fixing; new curbs on consumer lending expected.
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GT Bank targets east Africa acquisition; Standard Bank reaffirms Africa focus.
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Public spat with Forbes over rich list; follows new CMA appointment.
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Bahrain’s Investcorp has carved out a solid reputation over the past 30 years, but how is its founder preparing the firm for the future?