Popular African Banks: Assets and Market Value go head-to-head

Dear Africa Interested Individuals:
                                                        In continuation from yesterday' article, most African banks have increased their asset base over the first six months of 2015 despite the difficult business environment across the continent.  If the markets are largely efficient (some are not,) African banks should not be able to manipulate their share prices.  Based on this logical expectation, I decided to directly compare what banks have control over (assets) and what they do not (market value.)  Banks want both indicators to move in the upward direction.  The reference date for assets and market value is June 30th, 2015.  The figure for FNB Botswana is annual while the others are half-year figures.  The banks are arranged in order from the bank with the least market value relative to its assets to the most market value relative to its assets. 

The countries covered are Malawi, Ghana, Zimbabwe, Kenya, Nigeria, South Africa, Uganda, Mauritius, Egypt, Rwanda, Botswana and Zambia.  

It is interesting to note that the top performing stock market in Africa thus far in 2015 (Malawi) has its two represented banks at the bottom of the ranking.  Apparently size is not that appealing when it comes to investing in African banks.  Africa's largest bank by reach (ETI) and assets (Standard Bank) are ranked 5th and 6th respectively.  The two Nigerian banks with the lowest relative weighting, also have the lowest price to book values in the Nigerian banking industry presently.  Standard Chartered Bank appears to get a premium wherever it trades.  Its Kenya & Ghana subsidiaries have higher market values relative to their assets.  Remember the article on SCB Ghana and Ecobank Ghana, where SCB Ghana is still trading way ahead of Ecobank Ghana despite its sub-par performance relatively and absolutely.

The largest banks by assets in Malawi, Uganda, Botswana, Ghana and Rwanda apparently revered by investors and hold value because of their size.  The same can not be said for the largest bank by assets in South Africa, Nigeria and Zimbabwe.  The most revered banks (based on this analysis) in Nigeria  and Kenya are not the largest banks in their respective countries.  

Cal Bank is the most undervalued bank in Ghana based on this analysis.  The  management recently blamed stockbrokers for its cheap price.  Before Cal bank heaps blame on brokers for its low stock price, it needs to address the 'living on the edge' situation it is presently in.  Loans exceed deposits and the bank is heavily debt burdened.  Now without much ado, the list.  It goes from smallest to largest. 

1. Skye Bank   2.64%      

2. CBZ Holdings Zimbabwe   3.0%

 3. Access Bank  5.4%

 4. First Bank Nigeria  5.89%

 5. ETI  8.94%

 6. Standard Bank  12.19%

 7. Nedbank 13%

 8. Barclays Africa  14.92%

 9. Zenith Bank  15.57%

 10. SBM Holdings Mauritius  17.18%

 11. Cal Bank Ghana 19.48%

 12. Credit Agricole Egypt  21.08%

 13. Ghana Commercial Bank  26.63%

 14. Commercial Int. Bank, Egypt  27.83%

 15. I & M Bank Kenya  27.94%

 16. Kenya Comm. Bank  28.83%

 17. Guaranty Trust Nigeria  31.24%

 18. Bank of Kigali  36.71%

 19. Ecobank Ghana  37.75%

 20. SCB Kenya  40.51%

 21. Equity Group Kenya  42.94%

 22. FNB Botswana  47.8%

 23. Stanbic Bank Uganda  48.16%

 24. SCB Ghana  61.66%

 25. Zambia National Comm. Bank  179%

 26. National Bank of Malawi  533%

 27. Standard Bank Malawi  566%


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