European banks are steadily reducing their presence in Africa, creating space for pan-African and regional banking groups to expand into markets once dominated by international lenders. A report by Fitch Ratings says the change is creating opportunities for African banks to build scale and use their knowledge of local markets, but it also brings new risks around credit quality, foreign-currency funding and access to international banking networks.
The shift is changing how banking services are delivered across the continent, with regional banks increasingly taking on the role of supporting trade, small businesses, retail customers and cross-border payments.
A decade of retrenchment
European banks have been reducing their African operations for several years. Standard Chartered, Société Générale, Barclays and other international banks have sold subsidiaries or withdrawn from selected markets as they have reassessed returns, capital needs and the cost of operating across a large number of countries.
Fitch says European banks have faced a combination of tighter capital rules, higher compliance costs and limited synergies between African subsidiaries and their wider international businesses. African banking markets are also relatively shallow in many countries, with lending often concentrated among large corporates and governments. This can make it harder for international banks to achieve the scale and returns they need from a broad local presence.
In October 2025, Standard Chartered agreed to sell its wealth and retail banking business in Uganda to Absa Bank Uganda, while retaining its corporate and investment banking operations in the country. The transaction formed part of Standard Chartered’s wider effort to focus on affluent customers and cross-border banking rather than mass-market retail activities in selected countries.
Access Bank has followed a similar path. The Nigerian lender has used acquisitions to build a wider African network, including taking over Standard Chartered’s operations in Angola. Access Bank’s 2025 financial statements show that Access Bank Angola acquired 60% of Standard Chartered Bank Angola in October 2024, bringing the former Standard Chartered business into the Access group.
Société Générale’s disposals have created another route for African banking groups to expand. The French bank has sold several African subsidiaries to groups such as Vista and Coris, with the transactions allowing these regional players to gain established customer bases and operating platforms rather than entering markets from scratch.
The change can also affect the credit standing of the businesses being sold. When a subsidiary loses a highly rated international parent, rating agencies can no longer assume that the parent would provide extraordinary support during periods of stress. This can result in weaker shareholder support assessments even where the subsidiary itself continues to have sound governance and risk controls.
The regional model offers a different growth path
The appeal of regional banking is partly based on proximity. A bank that operates across neighbouring African markets can understand local businesses, currencies, regulations and customer behaviour while still achieving a level of scale that a single-country bank may struggle to reach.
Equity Group illustrates this approach. In April 2026, its chief executive told Reuters that the Kenyan banking group was looking at acquisitions in Angola, Zambia and Mozambique. The strategy is based on following customers and trade routes rather than simply adding countries to its footprint. Equity has already built a sizeable position in the Democratic Republic of Congo through acquisitions, where Reuters reported that it held about 24% of the market.
This approach can also reduce the cost and complexity of entering a new market. Equity has said that acquisitions are preferable to building operations from scratch because an established bank already has customers, staff, licences and local knowledge. The same logic is visible across other African banking groups seeking to expand through acquisitions.
Competition is nevertheless becoming more intense. Reuters reported in June 2026 that banks including Egypt’s Commercial International Bank, Nigeria’s Access Bank and South Africa’s Nedbank were expanding in Kenya. They are competing with established players such as Equity Group and KCB, which already have large customer bases, strong local franchises and advanced digital banking platforms.
The result is a banking market in which African institutions are no longer simply filling gaps left by European banks. They are actively competing with each other for regional scale.
Cross-border banking becomes more important
The regionalisation of African banking is taking place alongside efforts to make cross-border trade and payments easier.
Ecobank, one of the continent’s largest pan-African banking groups, has continued to build partnerships around cross-border payments and trade. In October 2025, Ecobank and Thunes announced a collaboration aimed at enabling instant cross-border payments across sub-Saharan Africa. The partnership connects banking and fintech infrastructure to support payments for individuals and businesses operating across borders.
The wider development of African payment infrastructure could make regional banks more valuable as connectors between markets. Reuters reported in June 2025 that the Pan-African Payment and Settlement System, or PAPSS, had expanded to 15 countries and around 150 participating banks. The system allows participating businesses and financial institutions to make cross-border payments in local currencies rather than relying on dollars or other foreign currencies for every transaction.
Local and regional banks therefore need to develop their own international networks, partnerships and payment capabilities if they are to replace the services previously provided by European institutions.
The funding challenge
The main risk is that local ownership does not automatically replace the financial strength and global connections of a large European parent.
European banking groups have historically provided African subsidiaries with access to international funding markets, correspondent banking relationships, trade-finance networks, risk-management systems and foreign-currency liquidity. Fitch warns that successor banks could have more limited access to hard-currency funding and could become more exposed to difficult operating conditions in the markets where they expand.
The IMF’s 2026 assessment of the West African Economic and Monetary Union found that the region’s banking system remained broadly solid, but persistent non-performing loans, high exposure to governments and weaker liquidity remained concerns. The banking system’s capital adequacy ratio was 15.1% in June 2025, above the regional minimum, but the average non-performing loan ratio had reached 9.2%.
The IMF also points to the strong relationship between governments and banks as a financial stability risk. Government claims represented around 37% of bank assets in the WAEMU in 2024, creating a link through which pressure on public finances could affect banks and vice versa.
Similar risks appear elsewhere. The IMF’s 2026 assessment of Angola’s financial system identified high non-performing loans, a strong sovereign-bank relationship and exposure to foreign-exchange risks as areas requiring attention.
For regional banks, therefore, expansion brings both greater revenue potential and greater concentration of risk. A bank operating in several countries may have a broader customer base, but it is also exposed to more currencies, regulators, political conditions and economic cycles.
Local knowledge can support financial inclusion
One potential benefit of the shift is a stronger focus on customers that international banks have traditionally found less attractive.
Pan-African banks can use their regional networks to serve SMEs that operate across borders, local companies involved in trade and consumers who may have been outside the target market of international banks. Their understanding of local markets can also help them design products around the needs of smaller businesses.
The development of cross-border payment systems could reinforce this trend. The African Development Bank reported in 2026 that regional integration remains constrained by fragmented financial, regulatory and infrastructure systems, but that efforts to connect markets are increasing. Its work on regional integration includes support for financial systems, digital connectivity and cross-border trade.
In East Africa, the African Development Fund approved a $9 million grant in June 2026 to support financial integration across nine countries. The project aims to improve capital markets, payment systems and access to long-term finance while strengthening regulatory capacity.
These developments create an environment in which regional banks can potentially use their existing networks to support a more integrated African market.
Scale will not remove the risks
The expansion of African banks should not be viewed as a simple replacement of European banks with stronger local institutions. The new owners inherit many of the same difficult markets and risks that contributed to the original exits.
This makes risk management particularly important. Regional banks need to maintain strong underwriting standards as they grow, avoid excessive concentration in government debt and manage foreign-currency liquidity carefully. They also need to preserve the governance and risk-management standards that have helped some former European subsidiaries remain resilient after ownership changes. Fitch argues that the success of the transition will depend partly on whether successor institutions can maintain these standards while expanding their balance sheets.
The challenge becomes greater as banks expand across several regulatory systems. A regional group must manage different capital rules, currencies, supervisory expectations and economic conditions while still gaining enough scale from its network.
A new role for European banks
In its report, Fitch says that it does not expect European banks to disappear entirely from Africa. Instead, their role is likely to change.
Rather than owning large retail banking networks, European institutions could increasingly work with African banks through partnerships, trade finance, correspondent banking, risk-sharing arrangements and other forms of cooperation. This would allow European banks to maintain connections to African markets without carrying the full capital, compliance and operating costs associated with owning subsidiaries.
This model is already visible in the growing number of partnerships between African banks and international financial institutions. Ecobank, for example, has continued to build international relationships to support trade and cross-border financial services. In December 2025, it signed a memorandum with Bank of China Mauritius to explore greater cooperation in trade finance, payments and China-Africa financial flows.
The model could therefore become less about European banks competing directly for African retail customers and more about international banks providing funding, expertise and global connectivity to regional institutions.
The European retreat is therefore not simply an exit story. It represents a transfer of banking capacity and ownership that could give African institutions a larger role in financing the continent’s economies. The outcome will depend on whether those institutions can turn local knowledge and regional reach into sustainable growth without taking on risks that their new scale makes harder to manage.
