West Africa awaits Nigeria refinancing

The total Tier 1 capital of West and Central Africa’s Top 20 banks has fallen over the past year from $15.6bn to $14.9bn, as the region’s banks have struggled. There are 12 Nigerian banks in the regional table, one fewer than last year, with three from Côte d’Ivoire, two from Ghana and one each from Togo, Gabon and DR Congo.

Access Bank has overtaken fellow Nigerian bank FBN Holdings (First Bank of Nigeria) to become the biggest bank in the region. FBN falls to third after being overtaken by Zenith Bank. Ecobank Transnational stays in fifth place as the biggest non-Nigerian bank in the table, followed by BGFI Gabon with $1.3bn, a big rise on the $844m we recorded last year.

The history of the Nigerian banking sector has been marked by periodic waves of consolidation as the Central Bank of Nigeria (CBN) has introduced new capital requirements in order to strength the industry as a whole. In March 2024, the CBN embarked on another round of regulatory changes, setting a two-year deadline for achieving a minimum capital level of 500bn naira ($333m) for banks with international operations, 200bn naira ($134m) for those operating nationally and 50bn naira ($33m) for regional and merchant banks. These are big increases, with the previous threshold for banks operating internationally set at 50bn naira. Long-term inflation and currency devaluation meant that the existing requirements were a long way from adequate.

Current pressures have encouraged another round of consolidation in the Nigerian banking market. In September, Union Bank of Nigeria (UBN) and Titan Trust Bank announced the completion of their merger after it was sanctioned by the CBN. While Titan was not large enough to feature in our regional table, UBN is ranked in #15 place this year with $264m, a big fall on the $577m recorded in last year’s survey, which put it in tenth position. Titan was founded in 2018 with a strong focus on digital service delivery; the combined bank will now operate under the UBN brand. Many banks are still working to raise additional capital, so further mergers seem likely as the deadline approaches.

Central Africa is the weakest part of the continent’s banking ecosystem. The region is still over-reliant on the export of raw materials, while the private sector remains limited across many other parts of the economy. Some banks are only just starting to focus on targeting previously unbanked parts of the population and the small and medium enterprise (SME) sector.

Rising copper income helped boost Rawbank’s net profit to $212.7m for 2024, a rise of 11% on the previous year. This was driven by a 34% increase in lending to $2.08bn, including a $400m syndicated loan for the Kamoa-Kakula mine, plus a 75% rise in customers on its digital platform IllicoCash, as customers in rebel-held areas of eastern DR Congo moved on to the service after the closure of bank branches on security grounds. Rawbank is now looking to make an acquisition outside the country to diversify its sources of revenue and support expansion.