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Industry holding steady.

As we enter the third quarter of 2010, African banks across the board appear to be in consolidation mood. Chastened by the global financial earthquake two years ago - and Nigeria's tremors last year - banks are drawing in their horns.

Africa's economic growth curve is expected to resume its relatively steep upward curve come 2011 and into 2012, and the major financial institutions, it seems, are keeping their powder dry in anticipation of much better times to come.

Nevertheless, some of the stronger players do not seem to have lost their appetite for adventure, albeit with a far greater degree of caution than had been the case during the first half of the decade.

Ecobank Transnational, for example, has opened a corporate banking arm headquartered in Johannesburg with offices in Paris and opening soon in London, followed by Dubai and later in New York and even, it is proposed, Beijing. (Page 36).

Ecobank quite clearly has read the runes and sees the need for a genuinely pan-African corporate bank to service the increasing number of home-grown multinationals and their foreign counterparts.

Interestingly, the lead financing for one of Africa's most ambitious urban development projects, Eko Atlantic in Lagos, is underwritten by a clutch of Nigerian banks supported by Dutch institutions. (Page 34). When the multibillion-dollar project is finally completed, it will also provide a fitting home for Nigeria's always vibrant financial sector.

Few regions in the world have embraced advances in technology as readily as Africa has. The region has also been in the forefront of adapting technology to suit the continent's special needs.

Our Cover Story (page 16) examines the role of technology in driving the expansion of banking services across the continent. It also discusses the issue of criminal fraud, which often follows in the wake of such expansions, and how these risks are being mitigated, again with the use of technology.

African Banker magazine has always focused on the people behind the corporate brands. We believe that outstanding leadership is still a key factor in successfully growing banks and avoiding the many pitfalls that await the unprepared in this industry.

Creative genius

With this issue we begin a new series on Africa's top bankers. We start the series with the profile of an extraordinary creative genius - UBA's Tony Elumelu. While this Nigerian banking icon is still three years short of his 50th birthday, his achievements will live on for decades to come.

Elumelu will have resigned from the bank by the time you read this - following a directive from the Central Bank of Nigeria limiting tenure for bank CEOs to a maximum 10 years, and applied retroactively.

While Elumelu will no longer be head of the bank he transformed from a middlesized Nigerian entity into a continental giant, his thoughts and ideas are still as relevant today as when he was still in office.

(Page 26). Shorter profiles of Kenya's James Mwangi, South Africa's Jacko Maree, Nigeria's Aig-Imoukhuede and Zimbabwe's Doug Munatsi appear in the same feature.

We revisit the thorny and controversial topic of bank charges and other services provided by South African banks.

The banking ombudsman in South Africa, the Finance Minister and the public are still unhappy at the response by banks to directives asking them to curb their charges.

Are the banks too greedy and too ready to milk cash from their customers at the smallest pretext? (Page 40).

Angola's rapid rise

Our round-up of African stock exchanges (Page 42) reveals a healthy trend towards bonds issuance and a new-found confidence in the more mature markets. Angola, rapidly rising to economic powerhouse stature, will soon have its own exchange and join the relatively small group of African capital markets.

It seems impossible to discuss anything African these days without reference to China. The China-Africa Fund, set up after the 2006 Beijing summit, has a mandate to raise $5bn for investment in Africaoriented projects. It has begun its second round of capital raising, aiming to secure $2bn over three years to add to the $1bn it received from the China Development Bank Corporation. (Page 48).

While the industry as a whole is holding steady, Africa's economy is gathering strength and should emerge into clear skies over the next year.

Copyright IC Publications 2008

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Publication:African Banker
Date:Jun 30, 2010
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