The 2023 edition of the Proshare Bank Strength Index, PBSI revealed four Tier 1 banks and financial holding companies retained their ranking in the industry.
Proshare disclosed this during the official launch of the second edition of its ‘Tier 1 Bank Report’ in Lagos on Friday.
In the report, it said, “Access Bank, Guaranty Trust Company, Zenith Bank and the United Bank of Africa, UBA retained their spots, while Stanbic IBTC and Fidelity Bank dropped from the Tier I ranking to Tier II.
“This is according to the methodology deployed by the PBSI, which requires that banks/financial Holdcos over the 50th percentile are ranked as Tier 1, while those below the mark are categorized as Tier II and III, respectively.”
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According to Proshare, Ecobank Transnational Incorporated, joined the Tier 1 ranking for the 2023 PBSI from the Tier II ranking in 2021/2022.
In the maiden edition of the “Tier 1 Banking Report” titled ‘The case for redefining tier 1 banks’, the PBSI focused on measures of asset quality, profitability, and liquidity.
This had been broadened to cover efficiency ratios, risk management, and digital income to incorporate assets, gross earnings (in absolute terms and on logarithmic scales), capital adequacy ratio, loans deposit ratio, cost to income-ratio, cost of risk, net interest margin, non-performing loans ratio, digital income to gross earnings ratio, and independent non-executive directors to board ratio, it said.
The report stated, “Dynamism would be a key feature for surviving business disruptions beyond 2023 revised. In discussions with bank chief financial officers, Proshare’s researchers noted that if commercial lenders are not going to be trapped by the next wave of socioeconomic dislocations, they must be prepared to transition from rigid routines and fixed outlooks to less formal and hierarchical structures that allow for better internal collaboration and the breaking of operational walls.”
