Foreign banks are pulling out of Africa after decades of operations, saddled by declining profits and rising operational costs. This reflects the continent’s changing investment landscape and the diminishing appeal of the financial services sector.
Ongoing exits are largely linked to increasing competition from telecoms and financial technology (fintech) firms. Mobile and digital financial services offerings have weakened the dominance of global banks, worsened by weakening currencies, political instability in several countries, and rising cases of terrorism.
A new study by global rating agency, Moody’s, spotlights recent exits, noting that a tough operating environment has seen top global lenders, which have operated on the continent for years, scale down operations or exit completely. Some have sold their African businesses to local banking operators.
‘Africa was long regarded as one of the next frontiers for global banking expansion. But the perception of many Western (foreign) banks has shifted over the last decade owing to disappointing profitability and rising operational challenges,’ Moody’s says.
The report notes that Western banking groups, some of which have been in Africa for more than a century, are increasingly leaving the continent, and as they reassess their strategies in Africa, a growing number are choosing to scale back or exit entirely from certain markets.
Since 2019, at least seven major foreign lenders have announced plans to either scale back or leave Africa completely. They include some large British and French banking groups, such as Barclays, Standard Chartered, BNP Paribas, Credit Agricole, Groupe BPCE, HSBC, and Société Générale.
The report notes that Africa’s retail banking in particular has fallen short of expectations for some foreign banks, with increasing competition from mobile and digital competitors challenging traditional banks’ market shares and profitability.
For African countries lacking comprehensive banking networks, Moody’s notes, mobile banking has become an easy alternative for money transfers and an important vehicle for increasing banking penetration.
But fintech startups and mobile money operators such as ‘Safaricom’s M-Pesa, Orange Money, and MTN Mobile Money have also expanded rapidly, offering a wide range of financial services to underserved individuals and new markets like the microcredit segment.’
Competition between traditional banks, fintech startups, and mobile money operators is intense, and traditional banks are working hard to defend market shares while preserving profitability, the report notes.
But rising interest rates at the tail end of the Covid- 19 have also dulled the attractiveness of African markets for some foreign banks, causing them to single out African operations as being higher risk but less profitable than other regions.
In addition, weakening in the value of some local currencies against the dollar or European units has cut the contribution of African operations to foreign banks’ revenues and profitability.
Recent economic shocks, such as Covid-10 in 2020 and the commodity crunch that followed, hit emerging African middle classes, adding further pressure.
‘Several countries are still bearing the scars of the pandemic in the form of higher debt and increased poverty,’ Moody’s says.
Moreover, political instability in several African countries has fuelled uncertainty and, in some cases, led to economic sanctions, constraining banks’ ability to conduct their business and repatriate profits.
There have been a series of coups in sub-Saharan countries in recent years, including Mali, Guinea, Burkina Faso, Niger, and Gabon.
The emergence of terrorist organisations in a few countries has also put African operations in the spotlight.
Tightened regulations on Anti-Money Laundering and Counter-Terrorism Financing have added greater complexity to banking operations, increasing the regulatory burden and magnifying reputational risk.
As of June 2025, 12 out of the 24 countries on the Financial Action Task Force’s grey list of jurisdictions under scrutiny for money laundering and terrorist financing were in Africa.
According to Moody’s US sanctions currently imposed on nine African countries add another layer of risk, and as a result, foreign banks, some of which have been in Africa for more than a century, are increasingly leaving the continent.
Britain’s Standard Chartered, which has operated in Africa for around 150 years, is progressively reducing its footprint.
The lender in 2022 announced plans to leave five African countries, Angola, Cameroon, Gambia, Sierra Leone, and Zimbabwe, and exit the Consumer, Private, and Business Banking segments in Tanzania and Cote d’Ivoire, given the complexity and high cost-to-income ratio of operating in these markets.
Its shareholding in these subsidiaries were finally sold to Access Bank in July 2023.
The bank has also announced plans to divest from its wealth and retail banking businesses in Uganda, Botswana, and Zambia.
Standard Chartered made a $217 million loss on the sale of its business in Zimbabwe, Angola, and Sierra Leone, largely due to forex translation.
Barclays, whose operations on the continent span more than 100 years, marked its complete exit from the region in December 2017 by reducing its shareholding in South Africa’s Barclays Africa Group from 62.3 percent to a non-controlling stake of 14.9 percent.
The lender sold off business units it did not consider core operations and shifted attention to consumer, corporate, and investment banking in Europe and US.
UK’s financial conglomerate Atlas Mara, which had acquired banks in seven African countries, has already exited the continent, terming its African investments ‘risky’ and the sub-Saharan African macroeconomic environment as ‘challenging’, exacerbated by Covid-19.
Consequently, from September 2020 to date, Atlas Mara has completely divested from Mozambique, Rwanda, Tanzania, Botswana, and Zambia.
In June 2023, French bank Société Générale announced the sale of its stakes in several African subsidiaries.
It sold its holdings in Mozambique (65 percent) and Burkina Faso (52.6 percent) to Vista Group, and its stake in Chad (67.8 percent) to Coris Bank.
Last month (August 2025), it also sold its 95.5 percent stake in Mauritania to Enko Capital.
In Cameroon and the Republic of Congo, the bank’s participations were ultimately acquired by the respective local governments, which exercised their right of first refusal.
Société Générale also announced that it had signed an agreement to sell its 57.2 percent stake in its Equatorial Guinea subsidiary to Vista Group.
However, since the announcement, there has been no official confirmation that the transaction has been completed.
As of June 2025, disposal processes are also underway in Guinea Conakry and Benin.
The bank cited a lack of critical mass and limited synergies with the rest of the group as key reasons for its exit, aiming for a more efficient allocation of capital.