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Nigerian Banks Rate Top in Africa

Sixteen Nigerian banks have been listed among the top 100 in Africa underlining the resilience of an industry that is undergoing a second round of reforms in six years.

A survey by African Business magazine using shareholders’ equity as defined by Basle-based Bank for International Settlements (BIS) found that in spite of the second round of reforms and the much feared global meltdown, Nigerian banks remained a powerful force on the continent with the 16 banks on the list followed by Egypt with 12 banks, Tunisia with nine and South Africa with eight banks.

BIS requires commercial banks to hold capital against risk-weighted assets, with emphasis on the banks’ soundness or underlying strength – the shareholders’ core capital available for absorbing actual or potential losses occurring from non-performing loans, bad debts and investments in risky securities or speculative investment activities.

Details of the survey showed Zenith Bank Plc led 15 other Nigerian banks with a seventh position ranking on the Africa’s top 100  followed by First Bank, which was ranked ninth, and Guaranty Trust Bank, which was ranked 14. Zenith Bank was also adjudged the leading bank in West Africa with capital of $2.2 billion, down from $2.9 billion and assets of $11.2 billion.

Under the immediate past Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, a banking consolidation raised banks’ capitalisation from N2 billion to N25 billion between June, 2004 and December, 2005 and by the time the exercise was concluded, only 25 of the 89 banks existing in 2004 made it.