Competition would spur growth.

North Africa has clearly been the second most important banking centre on the African continent after South Africa for several years.

After South Africa's big five, North African banks filled four of the top 10 rankings in last year's survey but they are not so dominant this year because of the rise of Nigerian financial institutions. This is a function of two factors: the overhaul of the financial services industry in Africa's most populous country and the lack of cross-border competition within North Africa. While Nigeria's GDP per head is lower than that of all five North African countries, its market of 140m people, strengthened banking regulations and oil revenues have allowed its largest banks to pull level with Morocco's biggest financial institutions.

Although Attijariwafabank occupies seventh position in the continental table, four Nigerian banks are more substantial than anything Egypt has to offer and are likely to over-take the Moroccan bank in the near future.

Nevertheless, the threshold required to secure a place in the North African top 20 has increased from $208m to $266m in just 12 months, so the region's banking sector as a whole is clearly making strong progress.

However, competition between Moroccan financial institutions has maintained the Maghreb country's position at the top of our table of North Africa's Top Banks.

Attijariwafabank's capital of $l,900m, up from $l,538m last year, has allowed it to overtake Groupe Banques Populaire, which suffered a small fall in capital, although the latter remains the most profitable financial institution in Africa. Perhaps surprisingly, Attijariwafabank's profits actually fell from $363m in our 2007 survey to $275m this year, so the struggle to be Morocco's leading bank is far from clear cut. Another development this year has been the emergence of Algerian banks. BEA, Credit Populaire d'Algerie and CNEP all figure in the top 10. Credit Populaire moves up from 10th to seventh on the back of an increase in capital from $400m to $556m. While the Algerian banking sector remains constrained by the lack of progress on economic reform, the influx of higher oil and particularly gas revenues is buoying the economy and maintaining strong growth levels.

Little cross-border competition

Although Egypt in particular is coming towards the end of a sustained period of banking sector deregulation, it is a pity that there has not been more opening up of domestic markets across the region. Many of North Africa's banks are of a similar size and so competition for both corporate and retail banking could be fierce. Analysts in the region have blamed the division between the francophone Maghreb and Egypt for this lack of cross-border competition, but there the banks of Morocco, Algeria and Tunisia still fail to challenge each other because of entrenched protection in the financial services sector.

This year, as in 2007, National Bank of Egypt continues to head the Egyptian banking industry, with capital up a steady $89m on the year, but still significantly behind the two Moroccan banks. Egypt's oldest commercial bank now has 423 branches and is in the process of carrying out a strategic reassessment with the support of consultants McKinsey & Co. covering the full range of its operations, with particular emphasis on risk management and private equity. Despite the progress that has been made at divesting government banking interests, there is still some way to go before the realignment of the Egyptian banking sector is complete. A report on the sector by Prime Holding, an Egyptian investment bank, concluded "Numerous domestic events have led to bearish performance of the banking stocks since the start of the year." These include the cancellation of the merger talks between Commercial International Bank and Arab African International Bank, the postponement of a 67% stake sale in Banque du Caire and a recently issued report by the Moody's rating agency revising the country's bank deposit ratings in view of the rising inflation and interest rate conditions. As elsewhere in Africa, Egypt is not immune from current global economic problems, so this is a difficult time to sell bank stocks. However, the report adds: "Local banks are currently well capitalised on their excess liquidity while maintaining better credit quality standards." Tunisian banks continue to figure strongly in our table. The country's banking sector is led by Societe Tunisienne de Banque (STB), which holds on to 11th place with a rise of $39m in capital to $377m. However, the gap between STB and Banque Internationale Arabe de Tunisie, Banque National Agricole and Banque de Tunisie is narrowing, with even the fourth biggest Tunisian bank only $65m behind STB in terms of capital and actually performing much better at present in terms of profitability. Such close figures indicate a very competitive market and it will be interesting to see if STB can stay ahead of the field next year.

North African

Regional                          Date of  Country  Capital  Assets
Ranking   Rank        Bank        results            ($m)     ($m)

 1          7   Attijariwafabank  Dec-07   Morocco   1,900   21,662

 2         10   Groupe Banques    Dec-07   Morocco   1,589   20,668
                Populaire

 3         13   Libyan Arab       Dec-06   Libya     1,299   16,820
                Foreign Bank

 4         14   National Bank of  Jun-07   Egypt     1,268   37,403
                Egypt

 5         18   Banque Marocaine  Dec-07   Morocco     749   13,892
                du Comm.
                Exterieur

 6         20   BEA               Dec-05   Algeria     561   16,858

 7         21   Credit Populaire  Dec-06   Algeria     556    6,856
                d'Algerie

 8         22   Commercial        Dec-07   Egypt       514    8,706
                International
                Bank

 9         24   Banque du Caire   Jun-06   Egypt       510    7,943

10         25   CNEP              Dec-06   Algeria     487   11,306

11         28   Soc. Tunisie. de  Dec-07   Tunisia     377    4,182
                Banque (STB)
                Bank

12         29   Societe Generale  Dec-06   Morocco     367    5,126
                Marocaine de
                Banques

13         29   30 Arab African   Dec-07   Egypt       356    8,015
                International
                Bank

14         31   National Societe  Dec-07   Egypt       347    8,618
                Generale Bank

15         33   Banque            Dec-07   Tunisia     330    3,961
                Internationale
                Arabe de Tunisie

16         34   Banque Nationale  Dec-07   Tunisia     317    4,140
                Agricole

17         35   Banque de         Dec-07   Tunisia     312    1,983
                Tunisie

18         37   HSBC Bank Egypt   Dec-07   Egypt       297    5,002

19         38   Bank of           Jun-07   Egypt       293    6,612
                Alexandria

20         43   Credit du Maroc   Dec-07   Morocco     266    4,224

21         46   Credit Agricole   Dec-07   Egypt       253    3,918
                Egypt Bank

22         48   BNA               Dec-06   Algeria     240   11,792

23         52   Amen Bank         Dec-07   Tunisia     224    2,266

24         56   Wahda Bank        Dec-06   Libya       177    2,253

25         60   Gumhouria Bank    Dec-06   Libya       146    3,845

Regional                                  CAR   Profits  ROE    ROA
Ranking   Rank        Bank                (%)     ($M)   (%)    (%)

1          7    Attijariwafabank          8.8     275    14.5   1.2

2         10    Groupe Banques            7.6     474    29.8   2.3
                Populaire

3         13    Libyan Arab Foreign       7.7     151    11.6   0.9
                Bank

4         14    National Bank of Egypt    3.4      67     5.3   0.2

5         18    Banque Marocaine du       5.4     278    37.1   2.0
                Comm. Exterieur

6         20    BEA                       3.3      20     3.6   3.6

7         21    Credit Populaire          8.1     150    26.9   2.2
                d'Algerie

8         22    Commercial International  5.9     266    51.7   3.1
                Bank

9         24    Banque du Caire           6.4      22     4.3   0.3

10        25    CNEP                      4.3     N/A     N/A   N/A

11        28    Soc. Tunisie. de Banque   9.0      26     6.8   6.8
                (STB) Bank

12        29    Societe Generale          7.1      95    25.9   1.8
                Marocaine de Banques

13        29    30 Arab African           4.4     131    36.8   1.6
                International Bank

14        31    National Societe          4.0     182    52.4   2.1
                Generale Bank

15        33    Banque Internationale     8.3      24     7.3   0.6
                Arabe de Tunisie

16        34    Banque Nationale          7.7      23     7.3   7.3
                Agricole

17        35    Banque de Tunisie         15.7     58    18.5  18.5

18        37    HSBC Bank Egypt           5.9     172    57.9   3.4

19        38    Bank of Alexandria        4.4      na     na     na

20        43    Credit du Maroc           6.3      72    27.0   1.7

21        46    Credit Agricole Egypt     6.4      95    37.5   2.4
                Bank

22        48    BNA                       2.0     132    54.8  54.8

23        52    Amen Bank                 9.9      24    10.7  10.7

24        56    Wahda Bank                7.8      18    10.2   0.8

25        60    Gumhouria Bank            3.8       9     6.1   0.2