Global banks are increasingly withdrawing from selected African markets, prioritizing capital efficiency and risk management, as regional giants pursue growth in economies where demand for financial services is expanding. The latest example is HSBC, which completed its withdrawal from South Africa after 30 years, following a 2024 decision to focus on other international markets. This trend raises questions about what international banks are finding difficult in African markets and whether their departure creates opportunities for local lenders.
Several global banks have sold businesses or reduced their presence in selected African countries. Barclays began reducing its 62.3 percent holding in Barclays Africa Group in 2017 and completed the sale of its remaining stake in 2022. The African business subsequently operated as Absa, although Barclays retained selected corporate and investment banking relationships. Standard Chartered announced plans in 2022 to exit retail banking in Angola, Cameroon, The Gambia, Sierra Leone, and Zimbabwe.
French lenders have also reduced their exposure in Africa. Société Générale has sold businesses in several African markets, while BNP Paribas closed its corporate and investment banking business in South Africa in 2024. Despite these withdrawals, analysts say that African banking has not become unprofitable. Rather, the departures reflect differences in the returns institutions expect from their investments, the costs of maintaining operations, and the strategic importance of individual markets to their global businesses.
Financial analyst Christopher Makombe said the departures should not be interpreted as evidence that banking business in Africa is no longer attractive. "The contrasting strategies reflect fundamental differences in business models, capital allocation priorities, and expectations of risk-adjusted returns," he said. Growth opportunities remain significant in Africa, with McKinsey & Company estimating that banking revenue across the continent reached $107 billion in 2025.
Tanzania stands out for its growth rate, with McKinsey estimating that banking revenue before the cost of risk rose from $1.3 billion in 2019 to $2.3 billion in 2024, equivalent to annual compound growth of 11.3 percent. This was more than double the approximately 3.5 percent annual growth recorded by Africa's banking market in US dollar terms over the same period. Domestic figures also point to expanding banking activity, with Bank of Tanzania data showing deposits rising by 25.9 percent to Sh50.02 trillion in the 2025/26 financial year.
Seasoned banker Kelvin Mkwawa said regional institutions could find opportunities in customer segments that global banks consider too small or costly to serve relative to their wider priorities. "Many African economies have growing SME sectors, expanding trade, infrastructure investment, urbanization, and demand for financial services," he said. Tanzania's CRDB Bank, for example, has expanded beyond its domestic market into Burundi and the Democratic Republic of Congo.
Analysts believe that the future of African banking will be shaped by strong pan-African banking groups that can translate regional expansion into sustainable profitability, sound risk management, and efficient capital deployment. "The future of African banking is still bright and will be shaped by strong pan-African banking groups," said Mr. Makombe. "The winners at the end will be those banks which are capable of translating regional expansion into sustainable profitability, sound risk management, and efficient capital deployment."
Key points
- Global banks are withdrawing from African markets, prioritizing capital efficiency and risk management.
- Regional African banks are pursuing growth in economies with expanding demand for financial services.
- The future of African banking will be shaped by strong pan-African banking groups.
