(3 minutes read)
- Egypt has the highest number of banks -21- which figure among the top 100 banks of Africa
- Morocco and Tunisia and South Africa are the other countries having higher number of banks at six each
- North African banks account for 45 of the entries in the 2021 survey of Africa’s Top 100 Banks. Importantly, 11 of them find spots in the continental Top 20
Egypt has the highest number of banks -21- which figure among the top 100 banks of Africa. Morocco and Tunisia and South Africa are the other countries having higher number of banks at six each. North African banks account for 45 of the entries in the 2021 survey of Africa’s Top 100 Banks. Importantly, 11 of them find spots in the continental Top 20.
The survey undertaken for selecting the top 100 Banks survey ranks the banks according to their Tier 1 capital, consisting of: capital + reserves + retained earnings + minority interests. The assets are denominated in local currencies and then converted into US dollars at the exchange rates as on 31 December 2020. This would mean that changing the exchange rate can have an impact on ranking. Fitch, the credit rating agency, has estimated that real GDP growth in Egypt slowed to 3% in the year to end June 2021, from 5.6% a year earlier. But forecast is that it may increase to 6% in the year to June 2022.
The Central Bank of Egypt cut interest rates by 4% in 2020 to support lending. Banks’ operating profits are down due to lower interest income and higher provision for non-performing assets. Morocco’s central bank, Bank Al-Maghrib, also cut the key interest rate by 0.75% to 1.5%. Other than that, the Bank has released the mandatory reserve requirement and eased the refinancing of loans to micro, small and medium-sized businesses.
