BankingEconomy

Proshare’s 2024 Rankings: Access Holdings Leads the Pack of Top Tier-1 Banks

Key Points

  • Top Performers: Access Holdings, Zenith Bank, FBN Holdings, Ecobank, UBA, and GTCO have been named leading Tier-1 banks in the 2024 Proshare Bank Strength Index (PBSI) report.
  • Access Holdings: Positioned as the leading bank in the PBSI report, noted for its proactive approach to addressing macro and microeconomic risks.
  • Technology in Banking: Emphasized the importance of investment in financial technology, customer service scalability, and digital asset engineering between 2024 and 2026.
  • Economic Context: Nigeria’s GDP grew from N38.78 trillion in 2005 to N77.94 trillion in 2023, indicating an average annual growth rate of 3.55%.
  • Bank Equity Growth: Bank equity sizes grew over ten times from N2 billion to N25 billion between 2000 and 2005, yet the GDP growth remained modest.

 

In recognition of their outstanding performance, Access Holdings, Zenith Bank, FBN Holdings, Ecobank, UBA, and GTCO have been named the leading Tier-1 Banks in the 2024 Proshare Bank Strength Index (PBSI) report.

The PBSI, which evaluates banks based on a comprehensive set of financial metrics derived from audited financial statements for the financial year 2023, underscores the significant strides these six lenders have made in the banking sector.

Access Holdings Leading the Race

Proshare’s latest report places Access Holdings at the forefront, alongside other prominent institutions such as Zenith Bank, FBN Holdings, Ecobank, UBA, and GTCO. As the Nigerian banking sector evolves, Access Holdings stands out for its proactive approach to addressing macro and microeconomic risks.

Also Read: Recapitalisation: Access Holdings N351 billion rights issue to open July 8

The report draws parallels to the challenges faced by U.S. banks like Silicon Valley Bank, First Republic, and Signature Bank in 2023 due to poor asset and liability management (ALM).

Technology is Key to the Banking Industry

With the Central Bank of Nigeria’s ongoing banking sector recapitalisation programme, the report highlights the importance of investment in financial technology, customer service scalability, and digital asset engineering between 2024 and 2026.

Analysts emphasise, “With higher capital levels, banks must use the larger amounts of cash available to improve shareholder returns and customer service experiences. Many banks will face significant challenges if they lack a deliberate strategy to transition from cash flow to value creation.”

How Nigeria’s GDP Fared in 2023

The report highlights Nigeria’s economic trajectory, noting, “Nigeria’s GDP in 2005 was N38.78 trillion and rose to N77.94 trillion in 2023, roughly doubling in nearly two decades, suggesting an average annual growth rate of 3.55 per cent.

However, between 2000 and 2005, bank equity sizes grew over ten times or by 1,150 per cent from N2 billion to N25 billion. Despite this significant increase in bank equity, the country’s GDP growth has been modest.”

Equity Base is Not a Guarantee for Economic Growth and Development

The report clarifies that simply raising Nigerian banks’ equity base does not guarantee economic growth and development. “Transforming bank equity into drivers of economic growth requires more than money; it requires a coordinated public and private sector plan, with what Proshare analysts have repeatedly called a whole-of-government approach to policies, programmes, and processes.”

Reviewing bank performances in 2023, Proshare analysts observed that banks were pursuing increasingly aggressive approaches to acquiring digital market share while supporting lower operating costs (lower cost-to-income ratios (CIRs)).

In conclusion, the PBSI report showcases the impressive performance of Nigeria’s leading Tier-1 banks and underscores the crucial role of technology and strategic planning in driving growth and stability in the banking sector.

Kayode Ogunwale

Kayode has covered the capital market since 2007 as a reporter and Capital Market Editor for major national dallies. He won the Capital Market reporter of the year award at the Nigeria Media Merit Award in 2011.

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