East Africa’s Banking Powerhouses Top 10 Banks 2024
In the latest African Top 100 Banks rankings, Ethiopia stands out with five banks represented, highlighted by the state-owned Commercial Bank of Ethiopia, which ranks 28th overall. This bank boasts a Tier 1 capital of USD 1 billion, a key indicator of its financial strength and ability to absorb losses, and an impressive ROE of 30%, a measure of its profitability. Tier 1 capital is a bank’s core capital, including equity capital and disclosed reserves, which is a crucial indicator of a bank’s financial strength and ability to absorb potential losses. ROE, or Return on Equity, measures a bank’s profitability and calculates how much profit a bank generates with the money shareholders have invested. The Development Bank of Ethiopia is close behind, coming in at 44th with a Tier 1 capital of USD 613 million.
Three privately owned banks, Awash International Bank, ranks 68th, followed by Dashen Bank and Bank of Abyssinia at 87th and 89th, respectively. Their return to the top 100 is a promising sign and a beacon of potential for significant future growth and performance. However, the devaluation of the Ethiopian birr have impacted their standings. On a positive note, the launch of the Ethiopian Securities Exchange (ESX) presents significant opportunities for these banks to raise capital and support the rapidly growing Ethiopian economy, attracting foreign banks eager to establish local operations.
Meanwhile, Kenya continues to dominate the list with ten banks, led by Equity Bank at 23rd and KCB Group at 25th, despite Equity’s reduced profits due to increased provisions for bad loans. Tanzania’s NMB Bank ranks 43rd, recognized for its commitment to ethical finance and a strong ROE of 35%, while CRDB Bank also performs well. Uganda’s representatives, Stanbic Bank Uganda and Centenary Rural Development Bank, at 71st and 79th, demonstrate robust profitability and stability amid significant investments in the country. Lastly, Rwanda’s Bank of Kigali, at 99th, is experiencing promising growth with rising profits, underscoring the region’s evolving financial services landscape. EBR
13th Year • November 2024 • No. 135