It has been anything but easy in Benin, as a grinding economic slowdown took its toll on the banking sector. Gross domestic product growth bottomed out at 2.9% in 2005, affected by the tightening of Nigerian customs laws restricting imports and disruptions at Benin’s main port of Cotonou. However, Bank of Africa has held its ground, reporting net profits for 2005 of CFA Fr2.2bn ($3.9m), which were modestly down on the previous year. Assets were up 6.9% to CFA Fr281.7bn.
“Since 2003, the bank has been facing, on the one hand, three years of economic slow down and, on the other hand, harsher competition as the number of banking institutions increased from six to 12,” says Bank of Africa general manager André Froissant. “So the strategy has been simple: increase the net income above the inflation rate, control general expenses despite national pressures on personnel costs, and manage counterparty risk in line with the downgraded environment. By doing this, the bank was able to maintain a RoE of 38.4% at the end of 2005.”
Despite Benin’s small size – a GDP of $4.4bn and a population of 7.4 million – Bank of Africa has pressed ahead with new product launches that most recently included Visa cards.
