The withdrawal of French banks from Africa will stimulate the development of Pan-African banks (Fitch Ratings)

The withdrawal of French banks from Africa will stimulate the development of Pan-African banks (Fitch Ratings)
The withdrawal of French banks from Africa will stimulate the development of Pan-African banks (Fitch Ratings)

(Ecofin Agency) – The disengagement of French banks should particularly benefit emerging regional groups such as Vista Group and Coris Bank, which will become credible competitors for other well-established pan-African establishments.

The acceleration of the withdrawal of French banks from Africa opens new growth prospects for emerging pan-African banking groups either organically or through mergers & acquisitions, estimated the rating agency Fitch Ratings in a note analysis published on Friday April 26, 2024.

Titled “French Banks’ Exit from Africa to Spur Local Banks’ Growth, Competition”, this analytical note recalls that the French group Société Générale announced on April 12 the sale of its Moroccan subsidiary to the local conglomerate Saham Group. This transaction follows several sales by French banks of their subsidiaries in Africa in recent years. Over the past six months, Société Générale had also concluded other transactions involving the sale of several of its subsidiaries in sub-Saharan Africa, and launched a strategic review to sell its 52.34% stake in the International Union of banks (UIB), its Tunisian subsidiary.

The presence of the BNP Paribas, BPCE and Crédit Agricole groups on the continent has also been greatly reduced over the last ten years.

Noting that other divestments by French banks of their activities in Africa are expected to continue in the next 12 to 24 months, particularly if valuations are attractive, Fitch Ratings clarified that the disengagement of French groups from the continent presents ” opportunities significant » for local and regional banks in Africa, despite some short-term challenges.

“Some banking groups with pan-African ambitions should eventually acquire enough scale to compete with long-established institutions. The Vista group acquired several banks, including some subsidiaries of Société Générale, in sub-Saharan Africa in 2023, which will increase its African presence to 16 countries. Coris Bank, which is already present in 11 African countries, completed the acquisition of the Chadian subsidiary of Société Générale in January and is awaiting regulatory approval to acquire the Mauritanian subsidiary of the same bank. Vista and Coris Bank now emerge as credible competitors to the well-established pan-African banking groups originating from South Africa, Nigeria and Morocco,” explains the agency.

Fitch Ratings also indicated that increased competition between pan-African banking groups should boost credit growth. Especially since subsidiaries of French banks are traditionally unable to target certain market segments, due to their conservative approach to risk appetite.

Also read:

07/12/2015 – Ecobank and Attijari are well ahead of French banks in French-speaking Africa

04/12/2024 – Sale of shares in Société Générale in Morocco: an agreement announced for $794 million

10/19/2022 – French BNP Paribas puts its subsidiary in South Africa up for sale

01/08/2022 – BNP Paribas proposes to sell its 54.11% stake in the capital of the Senegalese bank Bicis, to the Sunu group

06/23/2021 – BNP Paribas finalizes the sale of its subsidiary in Burkina Faso to Vista Bank Group

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