African banks’ foreign subsidiary contributions increasing; Access Bank records fastest cross-border growth
According to the UK-based firm, the contributions from these subsidiaries have grown over the past decade, and the increase has accelerated since the pandemic, propelled by acquisitions and, in the case of Nigerian banking groups, the devaluation of the Nigerian naira.
Fitch Ratings has revealed that the contributions from African banking groups' foreign subsidiaries are set to rise further in the medium term. These subsidiaries have seen a surge in recent years, particularly due to acquisitions and the devaluation of the Nigerian naira. Access Bank Plc has experienced the fastest cross-border growth among African banks in recent times.
The firm's report suggests that European banks scaling back their presence in Africa has opened up opportunities for African banking groups, especially in francophone West Africa. Additionally, new paid-in capital requirements across the continent are expected to sustain Mergers and Acquisitions activities.
Moroccan banking groups, however, present a notable exception, with the contributions of foreign subsidiaries decreasing in recent years due to their robust domestic growth and lack of acquisitions. Fitch Ratings attributes the cross-border expansion to the need to support customers involved in cross-border transactions, capitalize on the opportunities provided by the African Continental Free Trade Agreement, and benefit from the continent's overall economic growth and increasing financial inclusion.
Furthermore, the desire to diversify away from domestic risks is a significant factor behind this expansion. South African, Nigerian, and Kenyan banking groups, which have faced macroeconomic challenges domestically over the past decade, are actively pursuing this strategy.
Fitch Ratings evaluated 12 out of the 14 African banking groups featured in the report. These groups have subsidiaries in at least five African countries each and boast consolidated total assets exceeding US$15 billion as of the end of 2025.
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