East Africa has a fifth of the Top 100

East Africa contributes 20 banks to the African Top 100 Banks listings. Kenyan banks still dominate, making up 10 of the top 100 banks. The leader is Equity Bank, which is unchanged at 23rd in the ranking, with Tier 1 capital of $1.4bn and a healthy ROE of 20%. Second in the region is KCB Group, also holding its 25th spot on the Africa ranking.

Kenya remains a very competitive banking environment, where regulation has been nimble enough to allow it to leap ahead in terms of innovation and expansion, with telecommunications operators providing strong competition to the banks.

Equity Bank saw reduced profits for the year to December 2023 compared to a year previously, after doubling its provisions against bad loans (those that are not repaid).

Ethiopia now has five banks on the ranking. State-owned Commercial Bank of Ethiopia comes in third in the region and 28th in the top 100, with Tier 1 capital of $1bn and 30% ROE. State-owned Development Bank of Ethiopia is fifth in the region and 44th in Africa, with Tier 1 capital of $613m. The top Ethiopian privately owned bank is Awash International Bank (68th in the top 100), followed by Dashen Bank (87th) and Bank of Abyssinia (89th), back into the top 100 ranking after dropping out last year.

For the coming year, significant devaluation of the birr currency compared to the dollar, starting from the end of July 2024, could move some Ethiopian banks down the rankings. However, the launch of the Ethiopian Securities Exchange (ESX) is set to provide significant opportunities for banks to raise more capital and to grow to service the giant and fast-growing Ethiopian economy, where foreign banks are also setting up local operations and joint ventures in line with the policy approved by the Council of Ministers in 2022.

Tanzania’s NMB Bank, an African leader in ethical, gender and sustainable finance and previously known as National Microfinance Bank, is fourth in the region and 43rd in the top 100 with Tier 1 capital up to $616m and ROE of 35%. Another high-performing Tanzanian banks is CRDB Bank. The two banks both saw soaring profits in the year to December 2023, and have managed strong ROE ratios of 35% for NMB and 31% for CRDB. This is partly due to increased net interest income, but bad loan ratios have not increased.

Uganda is represented by Stanbic Bank Uganda (71st) and Centenary Rural Development Bank (79th). Both have strong records of profitability. The country is gearing up with heavy investment into oil and gas, mining has flourished, especially of gold, but manufacturing and food production are lagging past performance.

Rwanda’s Bank of Kigali stays in the Top Banks at number 99, with Tier 1 capital at $232m and net profit up from $51m in the year to December 2021 to $59m in the year to December 2023. That is testament to the growing importance of financial services in an economy that is set to be one of the fastest growing in 2024 and beyond.