African banks expand beyond home countries
Banking groups are hoping to capture expected growth in cross-border transactions and reduce exposure to domestic risks, a Fitch Ratings report said.
African banks are increasingly expanding their operations beyond their home countries, according to a report by Fitch Ratings. The expansion is driven by the anticipated growth in cross-border transactions and a desire to mitigate risks associated with individual domestic markets. Banks in Kenya, Morocco, Nigeria, and South Africa are at the forefront of this expansion.
The African Continental Free Trade Area (AfCFTA) is seen as a key driver of this trend, as it has the potential to significantly increase intra-African trade and investment. Fitch notes that the contribution of foreign assets held by three of Nigeria's largest banks - Access, UBA, and Zenith - grew sharply between 2021 and 2025.
The specific destinations for expansion vary. For instance, Nigerian and South African banks are attracted to Kenya's developing retail lending market, while Kenyan banks are increasingly targeting the Democratic Republic of Congo (DR Congo) after it joined the East African Community in 2022. These expansion moves provide African banking groups with wider revenue streams and improve their creditworthiness by reducing their exposure to weaknesses and shocks in individual countries.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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