A new report released by McKinsey & Company has revealed that the banking markets in Africa are among the most exciting in the world.

According to the McKinsey Global Banking report, the continent’s overall banking market is the second-fastest-growing and second most profitable of any global region, and a hotbed of innovation.

Nearly 300 million Africans are banked today, a number that could rise to 450 million in five years, the report said.

The report illustrates four segments of African markets – from the advanced markets like South Africa and Egypt to fast-growing transition markets such as Kenya, Ghana and Cote D’Ivoire, to sleeping giants like Algeria, Nigeria and Angola, to nascent banking markets like DRC and Ethiopia.

The report finds that Africa’s top quintile banks – the so-called “winners” – are simultaneously 4 times more profitable and over 2 times faster growing than bottom quintile banks.

The report’s key findings are that these “winners” are defined by employing one or more of five winning practices.

The first is ‘draw the right map.’

In Africa, geography matters. About 65 percent of African banks’ profitability (measured by RoE) and 94 percent of their revenue growth are attributable to their geographic footprint. Importantly, the report highlights a shift in exchange-rate-adjusted revenue pools North Africa, East Africa and West Africa, and away from South Africa.

The second is ‘right segments, compelling offers.’ It was discovered that 70 percent of revenue pool growth will occur in the middle segments, defined as earning between $6,000 and $36,000 in annual income. The mass market – individuals earning less than $6,000 per annum – accounts for 13 percent of the growth but is the fastest growing segment. Whichever segment banks choose, having the right proposition is key. Its survey of 2,500 banking customers in 6 African countries finds that 25 percent of customers choose price as the most important factors in choosing banks. Equally important is the convenience, also cited by 25 percent of customers. Service is the third most important factor, selected by 12 percent of customers. We also find huge cross-sell opportunities – while 95% of Africans have transaction products, fewer than 20 percent have lending, insurance, investment or deposit products.

The third is ‘leaner, simpler banking.’ Commenting on this, the report said while African banks’ cost: income has been falling, it found out that this is due to rising margins for banks, and their cost-to-assets ratio has actually been worsening. At 3.6 percent, Africa has the 2nd highest cost-to-assets ratio in the world. However, rapid efficiency gains are possible, and the research spotlighted eight African banks that have made strides in efficiency in the last five years, through a combination of three levers – end-to-end digitisation; sales productivity improvements fuelled by advanced analytics; back- and middle-office optimisation.

For the fourth point, it is ‘digital first.’ It was observed that 40 percent of Africans prefer to use digital channels for transactions. In four major African countries – South Africa, Nigeria, Kenya, Angola – a higher proportion of Africans prefer the digital channel for transactions to the branch channel. Given low branch density in Africa, banks need to employ a digital-first approach. The report hones in on four themes of innovation emerging in Africa on digital – end-to-end digital transformations (e.g. Equity Bank); partnering with telco companies (e.g. CBA in Kenya or Diamond Bank in Nigeria); building a digital bank (e.g. ALAT in Nigeria); and building an ecosystem (e.g. Alipay in China).

The first point is ‘innovate at risk.’ According to the report, African banking still has the second highest cost of risk in the world. Poor data availability is part of the problem: 11 percent of Africans are on credit bureaus, compared to in excess of 90 percent in advanced markets. However, we are seeing innovations such as banks partnering with data and analytics fintechs like Jumo to improve credit underwriting; banks partnering with telcos to leverage telco data to issue small-ticket loans on mobile, and players employing payroll lending across countries.

This new report draws on the experience of McKinsey’s partners and colleagues serving banks across Africa; McKinsey’s Global Banking Pools research; a proprietary database of the financial performance of 35 of Africa’s leading banks; a survey of executives from 20 banks and financial institutions across Africa; and a broad-based survey of 2,500 banking customers from 6 African countries – South Africa, Egypt, Nigeria, Morocco, Angola and Kenya.

SOURCE: https://brandspurng.com/africas-banking-market-second-most-profitable-fastest-growing-report/

good one

Nigeria would definitely enjoy the boom as well, not because of effective retail banking but illegal deductions from accounts steadily.

Access bank, First bank, UBA, Diamond bank, etc and their endless deductions, multiply that by the millions of accounts they have and see the results.

But how is it impacting on the real sector?

Yeah! When they deduct 36naira monthly for what I dunno, 65naira for using another ATM, and 3naira for messages even if itz your birthday message.

Why won't they grow?

S/O to diamond bank, you guys need to change from diamond to charcoal.

prettyboy5:
Nigeria would definitely enjoy the boom as well, not because of effective retail banking but illegal deductions from accounts steadily.

Access bank, First bank, UBA, etc and their endless deductions, multiply that by the millions of accounts they have and see the results.

Be saying rubbish about your country everyday .guys are making money from innovative business idea everyday .

Ok

Another Shit-holes' myth

I knew Africa's bank market would be very profitable.
Due to the bad power situation everybody owns a powerbank now.

See Nigerian banks dey collect stars for illegal deductions.

lakesider:



Be saying rubbish about your country everyday .guys are making money from innovative business idea everyday .

Be ignorantly saying trash about hiding your country's ineffectiveness and corporate corruption while other countries are developing faster, and its ignorance to think people who are making money from innovative business ideas don't say the harsh truth about ones country.

Lastly, have you made money from innovative business ideas too? Where are you on Forbes Billionaires list please? Number what?

Sleeping Giants ? hahahahaha

No wonder garri is so expensive

This is largely due to their hidden charges and illegal deductions. These banks rip apart their customers to make astronomical gains.

prettyboy5:


Be ignorantly saying trash about hiding your countries ineffectiveness and corporate corruption while other countries are developing faster, and its ignorance to think people who are making money from innovative business ideas don't say the harsh truth about ones country.

Lastly, have you made money from innovative business ideas too? Where are you Forbes list please? Number what?

I feel your pain man .
Sorry

lakesider:
I feel your pain man . Sorry

I feel your pain and ignorance as well man. Sorry for your misery as well man.

Why did they never mention the percentage of banking growth that looted funds have contributed, in the billions as per politicians and other public officials with access to public funds?
Or am i mistaken because of the looter’s preference of using non African banks?

yet the banking industry employs people that they pay peanuts yet give them unrealistic targets.

#bank work
#morden day slavery.

Uruan2023:
Yeah! When they deduct 36naira monthly for what I dunno, 65naira for using another ATM, and 3naira for messages even if itz your birthday message.

Why won't they grow?

S/O to diamond bank, you guys need to change from diamond to charcoal.

One time, I received 4 messages and 160+ was deducted.

However, rapid efficiency gains are possible, and the research spotlighted eight African banks that have made strides in efficiency in the last five years, through a combination of three levers – end-to-end digitisation; sales productivity improvements fuelled by advanced analytics; back- and middle-office optimisation.

'Middle office optimisation' - the phrase that caught my eye.

They make much profit discordant with the economies they operate in

Ok
But in another news:

COMPARE MAY 2015-DATE WITH PDP YEARS.
LET US SPEAK FACTS TO CURRENT POSITION.
THE BELOW IS FROM CHUKWUMA SOLUDO, FMR CBN GOVERNOR.

For those who are always talking about " 16 wasted years" and how they inherited " nothing".
Facts are sacred. Already in three years, APC has borrowed more money than PDP borrowed in 16 years,
N6 TRILLION IN 16 YEARS (PDP), TO APCs N11 TRILLION BORROWED IN 3 YEARS, WITH LIMITED INFRASTRUCTURE TO SHOW FOR IT.
My motive for posting this here has nothing to do with partisan politics as I am not a PDP member.
It has all to do with analysing competence and exposing deceit.

THE UNBIASED ASSESSMENT OF NIGERIAN ECONOMY BELOW WAS DONE BY CHUKWUMA SOLUDO TO SET AN AGENDA FOR APC GOVERNMENT IN THE EARLY DAYS OF THEIR ADMINISTRATION

Every team serious about ‘change’ starts with a clear identification of the baseline from which it measures deviations/progress. Nigeria has had 16 uninterrupted years of democracy with the PDP controlling the federal government as well as majority of the states. APC is now in charge at both the centre and majority of the states. A minimum standard for measuring ‘change’ is the extent to which APC government beats the record of the PDP in measurable terms. As the saying goes, if you can’t measure it, you can’t improve/change it!
Government must strengthen the National Bureau of Statistics (NBS) and preserve its independence to produce and publish credible national statistics. It needs serious funding. I really wish our policymakers can be a little less careless or casual about the use of official statistics. I criticised the last government for relying on ‘estimates’ by World Bank staff instead of the NBS statistics. When I hear the narrative so far in the media by the new government regarding the economy, I take it largely as the kind of ‘usual propaganda’ new officials deploy to show that their predecessors “did nothing” and therefore lay the ground for claiming that they are “doing everything for the first time in our history”. Fortunately also, there are many people as well taking a hard look at the numbers and recording scores. At AfriHeritage, we are developing a template for measuring government performance. As Nigeria has largely evolved into a two party state in a democracy, I prefer to frame the discourse on the baseline as ‘PDP’s legacy and the APC’s challenge’!
Since it is the practice to blame the PDP for every ill that befell our country in the last 16 years (and there are many of them) it is also fair to credit them with the positive ones. According to data from NBS, one outstanding legacy of the PDP is that in 16 years it held sway, it more than doubled the GDP of Nigeria (indeed with average year-on-year GDP growth rate in excess of 6% over the past 12 years, the GDP actually doubled within the last 12 years. It met average annual growth rate of about 2% and raised it to 6-7%, led by the non-oil sector. Yes, non-oil sector, and the “diversification” reported in the recently re-based GDP happened within the last 16 years. Will the economy more than double in the next 12 years under the APC? For me, if only the APC can double the size of GDP from about $550 billion to $1.1 trillion in 12 -16 years, and further half the poverty index, Nigeria will indeed be on course to be one of the largest 10 economies in the world by the end of this century.
As at 1999 when PDP came to power, Nigeria was largely a pariah state still lucky to have survived as one indivisible sovereign, especially in the context of the struggle by NADECO and restiveness in many parts of the country. On corruption, Transparency International scored it 1.6 out of 10 and ranked 98 out of 99 countries in 1999. Nigeria was listed among four countries that were non-compliant on the anti-money laundering rules by the Financial Action Task Force (FATF). We could not service our external debt and relied on stressful rescheduling, with all the intrusive donor conditionalities. Poverty was estimated at 70%, and unemployment at nearly 20%. The 1990s will go down in our economic history as the decade of stagnation: when per capita income growth was zero. Average oil price in May 1999 when President Obasanjo took over was $15.24 while stock of reserves was about $5 billion.
After 16 years, several challenges remain and some have even worsened (especially insecurity). Although President Jonathan’s regime had the worst economic management relative to the resources at its disposal, it must be stressed that tremendous progress was made in the aggregate 16 years of PDP government. Yes, it should have left more than $100 billion in reserves but left only $30 billion (still about six times of what it met). We also wish that Jonathan’s team did not leave Nigeria with unprecedented rate of debt accumulation. But, according to statistics from NBS, the PDP handed over a $550 billion economy (largest in Africa and 26th in the world), with 7.5% unemployment rate (better than European Union, France, Sweden, Belgium, etc although the underemployment figure is much higher); 32%?? poverty rate (as claimed by the former Finance Minister, or 61%??: NBS needs to clarify this claim); a stock of reserves of $30 billion; GDP growth rate averaging 6% over last 12 years; a relatively more diversified economy, with ICT penetration from 0.2% to over 60%, and a new contributory pension scheme now with trillions of Naira in pension fund. Our external debt is down although total debt stock is escalating. Our Gini coefficient (degree of inequality) is not different from China’s. Nigeria has consolidated and stronger banking system that currently finances both government debt and the private sector, with a relatively vibrant capital market. The capitalization of the Nigerian Stock Exchange grew from less than N1 trillion to N12 trillion as at handover. For the first time, Nigerian economy is now rated by credit rating agencies (Fitch, and Standard and Poor’s). Even on corruption perception, Nigeria is far better today than in 1999, and PDP created the two major anti-corruption agencies— ICPC and EFCC, and as at 2014 TI scored Nigeria 2.7 and ranked 136 out of 175 countries. PDP secured debt relief for Nigeria, thereby relieving Nigeria from the stranglehold of the IMF/World Bank policy conditionalities. APC does not have to negotiate with Washington on many economic policies. The list is long. The point therefore is that despite the fall in oil price, APC is starting from a much stronger base than PDP did in 1999 and the challenge now is to do far better. In the coming years, Nigerians will be asking APC to show us their figures!

Ok

lake sider:

I feel your pain man .
Sorry

Don’t mind that hungry boy ... aka prettyBOY5.... he is just annoyed that his scam business failed and he was exposed on Nairaland, see here: https://www.nairaland.com/168954/latest-free-mtn-browsing/1#2787160
Imagine him trying to steal N200 from people ... he’s just a hungry/angry fella

iluvpomo:
Don’t mind that hungry boy ... aka prettyBOY5.... he is just annoyed that his scam business failed and he was exposed on Nairaland, see here: https://www.nairaland.com/168954/latest-free-mtn-browsing/1#2787160
Imagine him trying to steal N200 from people ... he’s just a hungry/angry fella

Productive people don't take pigs like you serious, it baffles me how someone could be so jobless as having time to concoct imaginations about strangers online and go "researching" about them and spitting lies, you only deserve the same copy and paste reply below which I would endlessly use for you:

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!

Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

prettyboy5:


Productive people don't take pigs like you serious, it baffles me how someone could be so jobless as having time to concoct imaginations about strangers online and go "researching" about them and spitting lies, you only deserve the same copy and paste reply below which I would endlessly use for you:

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!

Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

I exposed you and you are pisséd off ... you are such a clown, so easy to dissect because you have the intelligence of a donkey .... a 2-2 donkey
The other dude was just a pawn ... as imbéciic as you are, that guy is twice as much judging by his posts .....
Triggering hacker101 is so much fun ... N200 scammer - ROFL

iluvpomo:

I exposed you and you are pisséd off ... you are such a clown, so easy to dissect because you have the intelligence of a donkey .... a 2-2 donkey
The other dude was just a pawn ... as imbéciic as you are, that guy is twice as much judging by his posts .....
Triggering hacker101 is so much fun ... N200 scammer - ROFL

You exposed who? Me pissed? That a total stranger is making silly accusations about me? Like seriously? You are just a girl, keep on going through people's past comments on Nairaland to push accusations, like seriously is that what you are here for? Carry on little girl! Keep nagging! I'm a enjoying the display, please dont stop.

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!
Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

prettyboy5:


You exposed who? Me pissed? That a total stranger is making silly accusations about me? Like seriously? You are just a girl, keep on going through people's past comments on Nairaland to push accusations, like seriously is that what you are here for? Carry on little girl! Keep nagging! I'm a enjoying the display, please dont stop.

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!
Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

Silly accusations? Are you really that daft??
Your very first post with this account speaks volume of your intentions with this sock puppet account .... (goodness grief, you are even dumber than a 2-2 dønkey if you fail to realize that) ..... Let me hear your explanation for creating this account/your first post ... I challenge you

Triggering hacker101 is so easy - LOL

iluvpomo:


Silly accusations? Are you really that daft??
Your very first post with this account speaks volume of your intentions with this sock puppet account .... (goodness grief, you are even dumber than a 2-2 dønkey if you fail to realize that) ..... Let me hear your explanation for creating this account/your first post ... I challenge you

Triggering hacker101 is so easy - LOL

Silly girl you are really high on attention issues. Who has the time to care about a foolish stranger online, think whatever you want, its your duty to be investigating past comments on Nairaland as you are that jobless, like seriously you think I can place importance to a silly little girl to even waste time to check your profile or comments or make accusations? Oh please! Would that add anything to me? My only duty here is reply any message/mention sent to me, and your reply remains the same:

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!
Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

prettyboy5:


Silly girl you are really high on attention issues. Who has the time to care about a foolish stranger online, think whatever you want, its your duty to be investigating past comments on Nairaland as you are that jobless, like seriously you think I can place importance to a silly little girl to even waste time to check your profile or comments or make accusations? Oh please! Would that add anything to me? My only duty here is reply any message/mention sent to me, and your reply remains the same:

Joblessness at its peak!
Keep on with your imaginary accusations. Since you are this infatuated about me and Arsenal continue researching about me and Arsenal as you are this jobless. Useless jobless animal, shut up or continue f*cking your mothers smelling p*ssy!
Joblessness at its peak! Carry on!
Let's see the new "research" you have about me, my biggest fan! We have heard your old follies, bring up new stuff okay?

You are back to rambling nonsensically...
Explain why your very first post with this sock puppet account is to try and scam people of 200 Naira ... I know you are daft but at least you can come clean with your failed low IQ plan