This year’s winners expect a solid decade of growth.
Africa faces a long journey to alleviate poverty. However, private wealth is on the rise on the continent. As of December 2020, total private wealth in Africa stood at $2 trillion, despite a 9% decline due to the Covid-19 pandemic, according to the authors of AfrAsia Bank’s Africa Wealth Report 2021. They expect Africa will be home to another 30,000 millionaires by 2025 and total private wealth will reach $2.6 trillion by 2030.
For wealth managers, particularly private banks, this is reason to cheer. Currently, they manage approximately $140 billion for Africa’s high net worth individuals (HNWIs). Considering that private banks target potential clients who have $500,000 or more in investable assets, industry watchers expect wealth management to expand by 40% over the next decade. This means more opportunities and intense competition for managers.
To serve this market, private banks have left nothing to chance when building their essential systems and services for HNWI clients. As a result, it has become paramount for private banks to invest in technology and innovations, skilled employees and client service, including research to understand affluent clients’ needs and lifestyles.
BEST PRIVATE BANK IN AFRICA
No bank understands the private wealth management market in Africa like Standard Bank. A banking powerhouse in the continent with $166.5 billion in assets, Standard Bank considers Wealth and Investments as one of its key divisions. By the end of 2020, the division boasted $7.1 billion in assets under management (AUM) and 1,449 HNWI clients. Although headline earnings declined by 27% to $11.7 million, mainly due to the effects of the pandemic, the division still commands a strong balance sheet.
For Standard Bank, wealth management is anchored on a strong desire to develop deep and intelligent relationships with a growing number of sophisticated clients. The end game for the bank is to become the financial partner of choice for Africa’s HNWIs, to manage, grow and protect their generational wealth. To achieve this, the bank has put client service at the core of operations and identified clients’ unique requirements as its value proposition.
Apart from targeting clients in South Africa, Standard Bank has built a presence across the continent while targeting global clients who have interests in Africa. To serve diverse clients, the bank has prioritized investments in digital innovations and platforms. Core among them is a wealth management app, dubbed My360, which enables users to view their financial status and provides them with greater control over their investment strategies.
BEST PRIVATE BANK FOR SUSTAINABLE INVESTING
AfrAsia Bank positions itself as a boutique financial service provider. The bank uses its Mauritius hub as a gateway for investments across Africa, Asia and beyond. This has been made possible by a strong foundation built over 14 years, whose four guiding pillars are customer focus, teamwork, innovation and sustainability. For instance, half of the country’s top 100 companies bank with AfrAsia, while it also boasts of having clients from more than 169 countries, 47 of which are in Africa.
The bank posted a 12% decline in net profit to $41.2 million in 2020, but sustainable investing continues to be a defining strategy for the bank. The strategy is driven by the belief that it is important to sow the green seed today to shape tomorrow’s sustainable world. To further its sustainability ambitions, AfrAsia received a €10 million (about $11.4 million) green credit line from the French Development Agency, which the bank is using to offer green car loans while targeting companies with its increased environmental sustainability focus.
Incorporating ESG-based offerings hasn’t hurt profitability, either. UBS’ Global Wealth Management division, its largest segment, reported $4.2 billion in pretax profit for the first nine months of 2021, a 34% increase YOY.
MOST INNOVATIVE PRIVATE BANK
Zenith Bank, Nigeria’s second-largest bank in terms of assets at $20.4 billion, opts to grow through innovation. The bank, which posted a $284 million (3%) increase in pretax profitability for the first half of this year, considers itself a technology-driven bank. Despite its 500-branch footprint, a continuous surge of digital transactions testifies that customers appreciate the bank’s innovative approach to delivering services.
The bank has achieved several firsts in deploying innovative products, services and alternative channels that ensure convenient, speedy and safe transactions. These include the Zenith Timeless Account, which allows people 55 years old and above to bank for free; and its Zenith Save4me high-interest target savings account. Recently, Zenith also debuted an interactive voice-response platform that lets customers perform basic transactions from their mobile phones.