BY ANTONY MUTUNGA
Lenders are currently enjoying profits of digital transformation as economies recover from Covid-19 crisis. For Equity bank, integrating technology led to a 36% profit growth after tax for Q1 2022 posting Sh11.86bn from Sh8.72bn it recorded in Q1 2021.
Absa Kenya also recorded a 22% growth with its net profit increasing from Sh2.41bn in Q1 2021 to Sh2.95bn. Attributing the growth to digitalization, banking brands also managed to be the most valuable brands in Africa according to Brand Finance, an independent brand valuation and strategy consultancy.
The Brand Finance Africa 150 2022 report highlights that banking brands topped the list of most valuable followed by telecommunication and retail. Fuelled by focussing on digital payments and online banking, African banking brands contributed to 26% of the total brand growth.
With the highest growth among the banking brands were Standard Bank, whose brand values increased by 26% to Sh186.72bn ($1.6bn), First National Bank, whose brand value went up 18% to Sh186bn ($1.6bn) and Absa, 16% to Sh163.38bn ($1.4bn).
Besides being the most valuable, a number of banking brands also made up the strongest brands which the report determines through a “balanced scorecard” of metrics evaluating marketing investment, stakeholder equity, and business performance.
“Capitec Bank from South Africa came out on top as the strongest brand in Africa with AAA+ brand rating corresponding to a Brand Strength Index (BSI) score of 92.4 out of 100,” the report said.
This is as a result of forming strategic partnerships to keep up with market and sector-wide trends in online banking and digital transformation. Most recently, Capitec Bank partnered with IT consulting firm Entersekt to leverage behavioural analytics and to enable a higher number of online transactions using e-commerce platforms. The company had a 41% increase in brand value to Sh72.94 billion $625 million.
Also, with a AAA+ rating is Kenya’s Equity Bank, which was among the top 10 strongest brands, coming in at position five with Brand Strength Index (BSI) score of 90.8 out of 100. The rise of the lender has been due to facilitating online banking with its mobile application, EazzyNet, which allows customers to use their bank account for online shopping, making transactions overseas, accessing loan options and paying bills via a smartphone.
Telecommunication brands have also been riding on growth in internet usage and mobile data. South Africa’s MTN is leading in the category and thanks to its diversification into fintech and mobile money – it is the most valuable brand in Africa with a 49% increase in brand value to Sh466.80bn ($4bn).
Vodacom with a brand value increase of 18% to Sh233.40bn ($2.0bn), and Maroc Telecom, brand value increase of up 12% to Sh99.31bn ($851mn) follow suite. As economies recover and people start spending again, retail brands have also increased with South African firm’s; Woolworths, Shoprite and Spar SA taking the top three.
In terms of countries, South Africa had the highest number of brands on the list, 83 making up almost three quarter of the total with brand value of Sh4.31 trillion ($36.9bn) followed by Nigerian brands with a brand value of Sh373.44bn ($3.2bn, then Egyptian brands Sh361.77bn ($3.1bn), Moroccan brands Sh303.42 ($2.6bn) and Kenyan brands Sh245.07bn ($2.1bn) respectively. .