Offshore investments become a hedge against currency volatility.
Wealth preservation and growth in Africa are highly challenging. The affluent know this too well, especially given the recent macroeconomic environment. High inflation, currency volatility, and foreign exchange scarcity have eroded wealth and significantly contributed to a decline in net worth for many people.
According to Lagos-based FirstBank, our Best Private Bank for Sustainable Investing, the average net worth of affluent customers in Nigeria is estimated at $1 million, who have seen their net worth decline due to high inflation and the devaluation of the local currency.
Such an environment has left high net worth individuals (HNWIs) in Africa torn between saving and investing. In response, many banks have developed financial advisory services anchored on diversification.
Chiko Manokore, Standard Bank’s head of Personal and Private Banking South Africa, reckons that tailored financial guidance has saved many affluent individuals from asset erosion. Through financial advice, many have seized opportunities in offshore investments, equity, money markets, and other savings and investment classes.
“This diversification is crucial given the volatility of emerging market currencies and the need to secure returns during uncertain times,” Manokore said in an online posting by Standard Bank.
Best Private Bank In Africa: Standard Bank
Standard Bank is determined to dominate private banking in Africa. With a regional presence that has 88 offices in 17 countries, the bank added over 73,000 new clients last year, bringing its total to 1.3 million.
The achievement is not a fluke. Instead, it has come through well-crafted strategies based on the bank’s offer of value to the affluent and the help it gives them in their wealth management journey with tangible outcomes. Apart from clients’ growth, the company’s books are ballooning. In 2023, assets under management (AUM) hit $8.7 billion, up 9% year over year. Pretax profitability was up 66% to $621.5 million.
Despite already being a powerhouse in Africa’s banking industry, Standard Bank is unrelenting. One of its growth strategies has been to expand its investment offerings to include active and passive solutions, structured products, ESG options, and offshore policies, also known as “wrappers.” The goal is to offer clients various tailored solutions that resonate with their wealth aspirations.
Best Private Bank For Sustainable Investing: Firstbank
FirstBank is achieving phenomenal growth through delivering customer-led innovation and disciplined execution. Last year, the bank’s profitability rose by 129% to $220.4 million. With $253 million in AUM, private banking clients grew from 4,000 in 2022 up to 5,000.
The bank is raising150 billion Nigerian naira (about $90 million) through a rights issue to maintain growth. The proceeds will support automation, enhance digital services, and drive the Africa expansion agenda. Adopting digital wealth management and robo-advisory tools will be particularly critical for the private banking segment.
For FirstBank, a commitment to a full disclosure policy on all qualifying transactions is critical. The bank also ensures that all its private bankers and wealth managers undergo mandatory training on operational risk, treasury products, credit, anti-money laundering measures, and combating the financing of terrorism.
Best Private Bank Digital Solutions For Clients: Guaranty Trust Bank
Guaranty Trust Bank (GTBank) prides itself on being a digital-first, customer-centric bank that helps HNWIs thrive. With operations in 10 markets, the bank posted profit before taxes of just over 1 trillion Nigerian naira for the first half of the year, becoming the first Nigerian financial institution to cross the 1 trillion naira mark in profitability.
Digital solutions have been essential to GTBank’s growth. The bank has invested in a new core banking system, Finacle. Adopting this system gives the bank stronger encryption, better fraud-detection capabilities, and more-robust systems to safeguard customer funds in a digital-first era.
Finacle—together with other digital solutions, including GAPS-Lite, a mobile app designed to simplify financial management; and GT eToken, which guarantees the security of electronic transactions—is at the heart the bank’s ability to offer seamless services to affluent clients. This is evident from the fact that most HNWIs rely solely on digital solutions for their banking needs.