African banking sector continues to thrive

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Standard Bank improving economic presence in Africa Standard Bank Group is the largest African bank by assets and earnings. PHOTO: Standard Bank

“We think Africa, along with many other institutions, it’s quite an interesting territory for us to be, very high growth rates over the next few years  and we also see some real interesting macro shifts,” Standard Bank South Africa’s joint-CEO Ben Kruger told CNBC Africa on Friday.

“Like everyone else, we think the high growth rate in Africa can continue and we’ve seen many of our customers doing more business in Africa, many more multinationals getting engaged, a really exciting time to be in Africa.”

According to credit rating business Moody’s, only 24 per cent of adults have bank accounts in sub-Saharan Africa and only 10 per cent have credit facilities.

This means that African banks have an opportunity to continuously reign in new customers that previously had difficulty in accessing financial services due to distance or poor infrastructure in certain areas.  

Because of the strong internet penetration in Africa through mobile phones, online banking has become a crucial service product for customers.

The continuous innovation within the technology space and the short space of time in which information technological tools are produced however means that banks have to make their services available on a variety of those products, if not all.

“It’s really remarkable to see Facebook and Twitter involved in banking in places that you would never expect to be in Africa. Africa is moving really fast and mobile telephony is playing a massive role in that, and we are really tuned in to that,” added Kruger.

There are, however, risks to social media as the type of information that a company and its employees could provide on such platforms could be private, defamatory or offensive.

African banks are also branching out into regional countries through intra-regional acquisitions and setting up branches outside of their home countries. Kenya Commercial Bank (KCB), for example, set up a branch in the South Sudan capital of Juba. As of October 2010, KCB had 11 branches in South Sudan.

“We see a significant portion of our earnings coming from Africa. We want to be relevant to our customer base in Africa and we want to make sure that our shareholders appreciate what we do. So we don’t have a target to be the biggest but we do think we are reasonably well-positioned for the very exciting opportunity in Africa and we remain quite focused,” said Kruger.