Home AWARDS The International Banker 2024 Middle East & Africa Awards Winners

The International Banker 2024 Middle East & Africa Awards Winners

by internationalbanker

 

On April 23, the South African Reserve Bank (SARB) published its April 2024 Monetary Policy Review (MPR), which covered three previous rate-setting meetings involving the Monetary Policy Committee (MPC)—November 2023, January 2024 and March 2024. South Africa employs an inflation target band of 3–6 percent for the headline Consumer Price Index (CPI), as calculated by Statistics South Africa (Stats SA).

“The MPC assessed serious upside risks to inflation in each of the three meetings, and these have remained broadly unchanged from meeting to meeting,” the MPR noted. “Oil markets remained tight and supply chains strained by geopolitical tensions. At the same time, domestic food price inflation remained volatile and susceptible to El Niño weather conditions as well as load-shedding. A weaker rand, along with elevated inflation in trading-partner economies, added to imported inflation, while inflation expectations remained elevated despite the moderation in headline inflation.”

While headline inflation has fluctuated within the 5–6 percent range since September 2023 and has, therefore, technically remained within the SARB’s formal target range, the MPR noted “uncertainty” surrounding the path back to the target midpoint in recent months as new risks emerged while others rematerialised. Indeed, the SARB’s Quarterly Projection Model (QPM) forecasts suggested that South Africa’s headline inflation would only converge to the midpoint of the target band from 2025 onward (as shown in Figure 1). In the meantime, sticky core inflation and resilient labour markets throughout advanced economies strongly implied that global policy rates would remain “high for longer”.

“Amid setbacks in recent domestic inflation outcomes, along with heightened uncertainty about global disinflation owing to stickiness in services inflation, markets now expect South Africa’s policy rate to remain unchanged this year,” the MPR noted.

Kenya aims to boost capital requirements for commercial banks to cover potential risks tied to the information and communications technology (ICT) sector and climate change. “The capital requirements for banks need to be increased. We have seen increased risks, whether it is from climate change or cybersecurity,” Kamau Thugge, the Central Bank of Kenya’s (CBK’s) governor, told reporters in early April. “We are in the process of deciding what kind of capital requirements we would require from the banks…. We need strong banks that can not only operate in Kenya, but also operate in the region.”

The central bank has been increasingly troubled by the rising nonperforming loan (NPL) rate within the Kenyan banking sector, with a 15.5-percent ratio recorded in February this year, up from the 14.8 percent recorded at the end of 2023. And although Kenyan banks have proven to be resilient on the whole, the capital adequacy ratios (CARs) of some institutions have come under pressure in recent years. While Thugge did not clarify the exact magnitude of the capital-requirement addition, details of his proposal are expected to be confirmed soon.

A stress test by the Kenya Bankers Association (KBA) published in May 2023, moreover, revealed that the Kenyan banking sector was distinctly vulnerable to climate change, with the physical risks stemming from the issue posing major challenges to banks’ stability. The Kenyan central bank also issued guidance in 2021 for banks to effectively manage climate-related risks, before joining the Network for Greening the Financial System (NGFS), which today counts more than 150 central banks and financial supervisors among its members.

The Central Bank of Nigeria (CBN) recently instructed banks and financial institutions to impose a 0.5-percent cybersecurity levy on electronic transfers to raise funds to combat cybersecurity threats and enhance the security of online transactions. But this “cybersecurity levy” has been met with much anger from Nigerians.

The levy was due to come into effect on May 20, with the CBN ordering all banks, financial institutions and payment service providers to implement it at the origins of electronic transfers, with the deducted amounts clearly shown in customers’ accounts with the designation Cybersecurity Levy. Certain transactions are exempt from the levy, such as loan disbursements, salary payments and inter-bank transfers, as well as inter-branch transfers within a bank, cheque clearing and settlements and ⁠letters of credit (LCs).

Elsewhere, Nigerian lenders enjoyed stellar gains as a result of the devaluations of the naira in June 2023 and again in January 2024 in a bid to unify official and unofficial exchange rates in the country. The combined foreign exchange (forex) revaluation gains of eight Nigerian banks soared by 472.3 percent last year, including those of Zenith Bank, United Bank for Africa (UBA), Access Holdings, FCMB (First City Monument Bank) Group, Stanbic IBTC Holdings, Fidelity Bank, Guaranty Trust Holding Company and Sterling Financial Holdings Company.

On March 6, the Central Bank of Egypt (CBE) implemented a series of hugely consequential measures, including a massive interest-rate hike of 600 basis points (bps), an agreement to slow down infrastructure spending and a monumental devaluation of its currency, all in exchange for receiving a hefty extension from the International Monetary Fund (IMF) of its existing loan facility from $3 billion to $8 billion.

These moves follow a $35-billion deal agreed with the United Arab Emirates (UAE) in late February. A critical shortage of foreign exchange has proved hugely damaging to Egypt’s business sector in recent months and has also pushed the costs of imported goods significantly higher. Israel’s war in Gaza has also exacerbated Egypt’s economic pressures, with tourism revenue taking a substantial hit.

The IMF has long insisted that Egypt should tighten its monetary policy to rein in inflation, which still sits well above 30 percent. “The CBE will continue to target inflation as its nominal anchor, allowing the exchange rate to be determined by market forces,” the central bank promised in a statement, adding that it had managed to “secure funds” for market needs. “We have sufficient foreign currency to cover our obligations, particularly after the unification of the exchange rate,” the central bank’s governor, Hassan Abdalla, confirmed, adding that the bank will focus on slowing down double-digit inflation. “We will not hesitate to take any measures to fight inflation.”

The implementation of a more flexible official exchange rate was seemingly another major requirement from the IMF to unlock the $5 billion in additional funds. The devaluation pushed the pound close to its black-market value, as it initially plummeted from just under 31 per US dollar to more than 50 for a few brief hours before stabilising at around 48. “We’ll have to wait to see where it settles,” Farouk Soussa, an economist at Goldman Sachs, told Bloomberg. “We expect 45-50. The big surprise of the day was the mega hike, which over-delivered and has boosted confidence in the market.”

Whether such bold moves will prove effective in sufficiently containing inflation and triggering enough growth to finance the considerable government debt amassed by the administration of President Abdel Fattah el-Sisi to fund its extensive infrastructure-investment programme remains to be seen, however. “The most important thing to restore confidence completely is the commitment to this painful process,” Hisham Ezz Al-Arab, chairman of Commercial International Bank (CIB), Egypt’s largest private lender, explained to Bloomberg. “From a private sector perspective, it’s quite obvious that the authorities are delivering on their promises to take the right corrective action.”

On April 16, a class-action lawsuit was filed by Lebanese depositors in the United States against the Central Bank of Lebanon (Banque du Liban, or BDL) and several members of the Association of Banks in Lebanon (ABL), alleging they were engaged in illegal activities aimed at defrauding depositors. According to Lebanese news publication NOW Lebanon (NOW), the accused, who are also board chairmen at Alpha Group banks as well as auditors, are charged with “engaging in and carrying out an intentional scheme to defraud depositors by misrepresenting the financial health of the Lebanese banking system and of the Commercial Bank Conspirators, and fraudulently representing to depositors that they would be able to access their deposits, in order to solicit depositors to maintain deposits of US dollars with the Commercial Bank Conspirators”.

With Lebanese banks having stopped payments to depositors since October 2019 as part of a set of strict capital controls implemented to prevent funds from exiting the country amid the painful financial crisis that has gripped the country in recent years, depositors have been forced to turn to foreign courts to reclaim their deposits. As such, a number of lawsuits against banks have now been registered.

“This action arises out of business transacted by Defendants and their many co-conspirators in New Jersey and in the United States,” the lawsuit text, seen by NOW Lebanon, stated. “This is the first case of its kind to allege a single conspiracy, in violation of federal RICO and state common law of conspiracy, directed by BDL and including a large consortium of Lebanese commercial banks (the ‘Commercial Bank Conspirators’), who were specifically directed, and incented, by BDL to increase their dollar-denominated deposits, which they did.”

Elsewhere, Swiss financial regulator FINMA (Swiss Financial Market Supervisory Authority) found that Banque Audi (Suisse) SA, a Switzerland-based subsidiary of Lebanon’s biggest banking group, breached its obligations in preventing money laundering and thereby “seriously violated” market law. FINMA initially announced the investigation in February 2023 as part of a broad corruption probe of more than a dozen Swiss banks for suspected customer relationships with disgraced former Banque du Liban President Riad Salameh, who was charged in 2022 with embezzling more than $330 million in public funds and is currently under criminal investigations for financial crimes in Switzerland and seven other jurisdictions, including France and Germany.

FINMA then opened enforcement proceedings against Banque Audi (Suisse), stating that it failed to meet its initial duty to provide information and had also “inadequately clarified the origin of assets in high-risk client relationships”. Consequently, FINMA ordered the bank to pay 3.9 million Swiss francs in “illegally generated” profits related to the suspicious transactions, as well as boost its capital buffer by 19 million francs. “In the course of the proceedings, the bank has cooperated with FINMA and took measures to restore compliance with the law,” FINMA explained in a statement.

In early February, Iraq banned eight local commercial banks from engaging in US-dollar transactions, so they can no longer access the Central Bank of Iraq’s (CBI’s) daily dollar auction, which is the main source of hard currency in the import-dependent country. The ban followed a visit from the U.S. Department of the Treasury’s top sanctions official, Brian Nelson, who met Iraqi officials in Baghdad in late January to discuss how to prevent Iraqi and broader financial systems from acting as sources of currency smuggling to neighbouring Iran. A Treasury spokesman quoted by Reuters said, “We commend the continued steps taken by the Central Bank of Iraq to protect the Iraqi financial system from abuse, which has led to legitimate Iraqi banks achieving international connectivity through correspondent banking relationships.”

As an ally of both the United States and Iran, and with more than $100 billion in reserves held in US institutions, Iraq plays a delicate balancing act to ensure it maintains good relations with both parties whilst ensuring Washington does not target its oil revenues and finances through punitive economic measures. The eight named banks banned by Iraqi authorities were Ahsur International Bank for Investment, Investment Bank of Iraq, Union Bank of Iraq (UBI), Kurdistan International Islamic Bank for Investment and Development (KIB), Al-Huda Bank, Al Janoob Islamic Bank for Investment and Finance, Al Arabiya Islamic Bank and Hammurabi Commercial Bank. The move follows similar actions taken by Iraq at the behest of the US in July 2023, when it banned 14 lenders from conducting dollar transactions.

According to recent data published by the Saudi Central Bank (SAMA), Saudi bank loans issued to non-financial government institutions and the private sector surged by a combined 11 percent to SAR 2.75 trillion ($733 billion) in March 2024 from SAR 2.48 trillion posted a year earlier. Representing the bulk of this growth, loans to non-financial government institutions climbed by a hefty 21 percent to SAR 157.5 billion by the end of March. The much weightier component of private-sector lending, meanwhile, accounted for 10 percent year-on-year growth, reaching SAR 2.59 trillion.

The news follows the hugely positive results posted by the Saudi banking sector for the full year of 2023. Published in March, global professional services firm Alvarez & Marsal’s (A&M’s) fourth annual edition of the “Kingdom of Saudi Arabia (KSA) Banking Pulse” for the fiscal year (FY) 2023 found that the performances of the top 10 banks in the Kingdom were “largely robust and positive”. Indeed, operating income grew by 9.5 percent, largely as a result of non-interest income (NII), which increased by 10.9 percent year-on-year, as well as non-funded income, which grew by 4.3 percent during the year.

2023 also saw net interest margins (NIMs) enjoy solid growth of 3.5 percent, with both the cost-to-income ratio (CIR) and the cost of risk (COR) demonstrating improvements—the former by 0.6 percent to 31.9 percent and the latter by five basis points (bps) to settle at 0.41 percent, as total impairments decreased marginally by 1.1 percent. Return on equity (ROE), meanwhile, climbed by 0.8 percent to a healthy 14.5 percent as a result of rising interest rates, which boosted profitability, as well as aggregate net income increasing by 11.8 percent. KSA banks’ returns on assets (ROAs) stayed constant at 2 percent.

Looking ahead, A&M confirmed its projections for Saudi banks to remain stable to positive. “Our 4th annual KSA Banking Pulse underscores the stability and growth potential of the Saudi banking sector, which has shown remarkable operating income growth and an uptick in return on equity,” Asad Ahmed, managing director and head of Middle East financial services at A&M, said of the results. “Despite some challenges in the economic landscape, the industry has adeptly navigated through, leveraging favourable credit conditions. Our analysis reflects the sector’s enduring stability and promising upward trajectory, reinforcing our optimism for its future.”

Regarding Saudi Vision 2030, the banking sector in the Kingdom is expected to play a central role in achieving its objectives. Mr. Ahmed also remarked, “Moving forward, we expect positive outlook[s] for KSA banks with prospective loan growth, improving asset quality and well-capitalised books. Given the upcoming scenario of interest rate cuts by the second half of 2024, we anticipate that NIMs will remain stable at around 3.0 percent during the year.”

 

 >>>MIDDLE EAST AWARD WINNERS  

 

BANKING CEO OF THE YEAR
Middle East
Mr. Hussein Abaza

Commercial International Bank (Egypt)

**********

BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR

Middle East
National Bank of Bahrain

**********

Best Banking Group Bahrain
Bank ABC Group

Best Banking Group Jordan
Arab Bank

Best Investment Bank Of The Year Bahrain
GFH Financial Group

Best Investment Bank Of The Year Egypt
EFG Hermes

Best Investment Bank Of The Year Qatar
QNB Capital

Best Investment Bank Of The Year UAE
First Abu Dhabi Bank (FAB)

Best Commercial Bank Of The Year Bahrain
National Bank of Bahrain

Best Commercial Bank Of The Year Egypt
Commercial International Bank (CIB)

Best Commercial Bank Of The Year KSA
Saudi National Bank (SNB)

Best Commercial Bank Of The Year Kuwait
National Bank of Kuwait (NBK)

Best Commercial Bank Of The Year Oman
Bank Muscat

Best Commercial Bank Of The Year Qatar
Commercial Bank

Best Private Bank Of The Year Bahrain
Ahli United Bank

Best Private Bank Of The Year Egypt
Commercial International Bank (CIB)

Best Private Bank Of The Year Kuwait
NBK Wealth

Best Innovation In Retail Banking Bahrain
Bank ABC

Best Innovation In Retal Banking Egypt
Banque Misr

Best Innovation In Retail Banking Jordan
Arab Bank

Best Innovation In Retail Banking KSA
Saudi Awwal Bank (SAB)

Best Innovation In Retail Banking Kuwait
Kuwait Finance House (KFH)

Best Innovation In Retail Banking Oman
Bank Muscat

Best Innovation In Retail Banking Qatar
QNB

Best Innovation In Retail Banking UAE
RAKBANK

 

 

 

 >>>AFRICA AWARD WINNERS  

 

BANKING CEO OF THE YEAR
Africa
Mr. Ebenezer Onyeagwu

Zenith Bank (Nigeria)

**********

BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR

Africa
Co-operative Bank (Kenya)

**********

Best Banking Group Kenya
Diamond Trust Bank Group

Best Banking Group South Africa
Standard Bank Group

Best Banking Group Togo
Ecobank

Best Investment Bank Of The Year Tanzania
NMB Bank

Best Development Bank Of The Year Africa
Banco de Desenvolvimento de Angola (BDA)

Best Commercial Bank Of The Year Ethiopia
Awash Bank

Best Commercial Bank Of The Year Ivory Coast
Société Générale Côte d’Ivoire

Best Commercial Bank Of The Year Kenya
NCBA Bank

Best Commercial Bank Of The Year South Africa
First National Bank

Best Commercial Bank Of The Year Tanzania
CRDB Bank

Best Commercial Bank Of The Year Tunisia
BNA Bank

Best Commercial Bank Of The Year Zambia
Zanaco Bank

Most Sustainable Bank Nigeria
Zenith Bank

Best Private Bank Of The Year Mauritius
MCB

Best Innovation In Retail Banking Ethiopia
Dashen Bank

Best Innovation In Retail Banking Ghana
Standard Chartered Bank Ghana

Best Innovation In Retail Banking Ivory Coast
Société Générale Côte d’Ivoire

Best Innovation In Retail Banking Kenya
Co-operative Bank

Best Innovation In Retail Banking Mauritius
MCB

Best Innovation In Retail Banking South Africa
Absa Bank Limited

Best Innovation In Retail Banking Tanzania
NMB Bank

Best Innovation In Retail Banking Uganda
Stanbic Bank

Best Innovation In Retail Banking Zambia
Zanaco Bank

 

 

Related Articles

Leave a Comment

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.