E-Financial
UBA, Others Lead as African Banks Make Waves
Ade Ayeyemi’s office in Lomé, the capital of Togo, is a good place to think about crossing borders. Ghana is ten minutes’ drive away.
From his window the boss of Ecobank can watch trucks rumble along the seafront, some bound for Burkina Faso, a day’s journey, or Mali, perhaps another day on. At night, cargo ships twinkle offshore. From here Ecobank’s vision—“to integrate the continent”, Mr Ayeyemi says—is clear. Whether it will be profitable is less obvious.
Ecobank was founded in 1985 by business leaders with backing from the Economic Community of West African States, a regional bloc. It has branches in 33 countries, more than any other African bank (see chart). It is not alone in its ambitions. Nigeria’s United Bank for Africa (UBA) wants to make half its profits elsewhere in the continent by 2022. South Africa’s Standard Bank recently opened in Ivory Coast, its 20th African country. Moroccan banks are trekking across the Sahara.
African bankers have long preached some version of what Tony Elumelu, UBA’s chairman, calls “Africapitalism”: the idea that far-sighted, home-grown businesses can drive development. In Nigeria banking reform in 2005 set off a wave of consolidation. The survivors were heftier and more profitable, with capital to invest abroad. Kenyan banks have used their edge in innovation, such as mobile banking, to push into neighbouring markets.
Regional banks are now filling gaps left by their European and American rivals, which are retreating from a continent they once dominated. Barclays sold a majority stake in its African business last year. Other global giants have also reduced their exposure to African markets, which they judge too small and too risky in an era of tightened regulation. African banks work closer to the ground. “Banking is a relationship game,” says Ugochukwu Nwaghodoh, chief financial officer of UBA. “We have local knowledge.”
The pan-African vision often clashes with the reality of a fragmented continent. Africa’s regional banks earn lower returns and grow more slowly than domestic rivals, calculate consultants at McKinsey. One problem is the wide diversity of regulations and markets. Another is that banks are too small outside their core markets to grow organically, says Olamipo Ogunsanya, an analyst at Renaissance Capital. Some have made risky acquisitions, inheriting loan books with hidden troubles. Most banks, she argues, would do better to focus on a few key countries.
Consider Ecobank. The board ousted a previous boss in 2014 over allegations of mismanagement. In 2016 a recession in Nigeria, its biggest market, resulted in a $131m pre-tax loss. It has shut 74 branches there and laid off 2,000 staff. It has scaled back its ambitions beyond west Africa. Although it has returned to profit, about 10% of its loans are non-performing. Expansion may have been too rapid, Mr Ayeyemi admits.
But regional bankers see two big trends in their favour. The first is new technology, says Mr Ayeyemi, which makes it possible to operate on a continental scale as never before. Ecobank can design products and process data centrally, he notes, providing services even where it lacks physical branches. Is Africa’s diversity a problem? “You don’t ask Unilever the same question,” he replies, likening retail banking to selling consumer goods. Ecobank’s mobile app, which lets people open accounts on their phones, has attracted over 5m users since its launch in 2016.
The other helpful trend is the spread of regional banks’ corporate clients. A recent study by the Boston Consulting Group finds that the top 30 African companies now operate in an average of 16 countries, twice as many as a decade ago. Standard Bank’s clients range from construction firms to airlines, says Sola David-Borha, who heads its operations on the continent outside South Africa. “They are helping to grow our market share, as we use our expertise to support their expansion.”
Regional banks are also using their geographical reach to act as natural conduits for cross-border flows of capital, such as migrants’ remittances. Mr Nwaghodoh argues that UBA’s large footprint reduces the cost of intra-African trade, since the bank can stand at both ends of the transaction. He also cites the example of the aid sector, where donors need a “last-mile” presence to distribute cash or pay workers.
The growth of cross-border banking carries risks, says Amadou Sy of the IMF. Regulators need to patch the holes through which a crisis in one country could leak into another. A supervisory college for Ecobank, comprising regulators from the countries where it operates, first met in 2015. European experience shows that such measures are not always enough, warns Thorsten Beck of Cass Business School in London. “When a bank actually fails,” he says, “then the politics comes in.” Although most African banks hold plenty of capital, problem loans have been rising.
Yet Mr Sy also notes that regional banks can spur competition and export innovation. A study by Mr Beck published in 2015 found that African firms got loans more easily when foreign banks held a larger market share—as long as those banks came from Africa or elsewhere in the developing world. Expansion has not yet paid off for Africa’s banks. But, like the incoming waves beyond Mr Ayeyemi’s window, they have the tide behind them.
This article appeared in the Finance and economics section of the print edition under the headline “Making waves”
Federal government has started new efforts to improve tax collection in the Federal Capital Territory (FCT) and stop the problem of multiple taxation.
Mr. Taiwo Oyedele, minister of Finance and coordinating minister of the economy, disclosed this after a meeting with Nyesom Wike, minister, FCT, on Sunday.
According to Oyedele, the meeting focused on strengthening cooperation between the Ministry of Finance and the FCT Administration to support development projects in Abuja.
A major part of the discussion was how to improve tax administration in the territory.
He explained that the proposed tax harmonisation would create a more coordinated tax system, reduce the burden of multiple taxes on residents and businesses, and improve government revenue collection.
Oyedele said the plan is in line with the new tax reform law and is expected to help accelerate development across the FCT.
“The two ministers also reviewed plans to harmonise tax administration within the FCT,” he said.
He added that the initiative would eliminate multiple taxation while ensuring that government revenue is collected more efficiently.
The meeting also examined ways to strengthen collaboration on infrastructure projects across Abuja.
According to Oyedele, discussions centred on supporting the FCT’s ongoing infrastructure renewal programme.
He commended Wike’s approach to development, noting that the minister has focused on completing long-abandoned projects rather than starting new ones.
Oyedele said this strategy is helping to unlock economic and social benefits for residents by bringing stalled public projects back into use.
The proposed tax harmonisation is expected to make tax administration easier for individuals and businesses operating in the FCT while aligning Abuja’s revenue system with the provisions of the new tax reform law.
Standard Bank Group has identified Nigeria and four other markets as strategic growth hubs as it seeks to tap into $15.4 billion revenue opportunity driven by expanding small and medium-sized enterprises (SMEs) and rising intra-African trade.
The bank disclosed the plan through Bill Blackie, the Chief Executive Officer of its Business and Commercial Banking (Standard Bank Group) division, who outlined the lender’s growth strategy in an interview with Bloomberg.
Under the strategy, Standard Bank will deepen its presence in Nigeria, Ghana, Kenya, Uganda and Tanzania while consolidating its dominance in South Africa. The five markets account for about 85 per cent of the estimated revenue opportunity available to the group’s BCB operations.
The expansion forms part of the lender’s broader ambition to accelerate earnings growth through 2028, leveraging increasing demand for banking services among businesses across the continent.
According to Blackie, the BCB division has recorded robust growth over the past five years, supported by rising business activity and greater demand for financial services across Africa.
He said the division doubled both headline earnings and return on capital between 2020 and 2025, with return on capital increasing from 19 per cent to 38 per cent during the period.
Earnings from operations across the continent also expanded at an average annual rate of 30 per cent.
Building on this performance, the bank is targeting compound annual growth of between eight and nine per cent through 2028, although Blackie expressed confidence that growth could reach double-digit levels as the strategy gains traction.
A key pillar of Standard Bank’s growth strategy is expanding support for SMEs and mid-sized businesses, which account for most enterprises across Africa.
The bank is particularly positioning itself to benefit from opportunities created by the African Continental Free Trade Area (AfCFTA), which is expected to accelerate economic integration and cross-border commerce across the continent.
According to the International Trade Centre, nearly half of Africa’s small businesses export to other African countries, compared with only 14 per cent of larger firms, underscoring the critical role of SMEs in driving regional commerce.
The lender is also leveraging its extensive African footprint and strategic partnership with the Industrial and Commercial Bank of China (ICBC) to attract businesses seeking access to international markets, particularly China.
The National Insurance Commission (NAICOM) has handed over the management of African Alliance Insurance Plc to a newly constituted board nominated by shareholders.
The move ends a regulatory intervention that rescued the troubled insurer from the brink of collapse.
The development marks a major milestone in the insurance industry’s efforts to strengthen policyholders’ protection and restore confidence in the sector, following months of intensive regulatory oversight aimed at stabilising the company.
NAICOM had stepped into the affairs of African Alliance Insurance in October 2024 after the insurer was hit by severe liquidity constraints, mounting annuity payment arrears, unresolved claims obligations, regulatory infractions and reputational challenges that threatened its survival and eroded public trust.
Speaking at the handover ceremony, Commissioner for Insurance, Olusegun Omosehin, said the intervention had achieved its primary objectives of restoring operational stability, settling outstanding liabilities and protecting the interests of shareholders and annuitants.
Omosehin said a successful turnaround demonstrates the regulator’s commitment to safeguarding the insurance industry while ensuring that policyholders do not bear the consequences of corporate distress.
He also highlighted the significance of the newly enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025, describing it as a game-changer for the sector.
The Commissioner observed that had the fund been in existence before the African Alliance’s crisis, it would have helped to cushion the impact on policyholders by facilitating the timely settlement of legitimate claims and annuity obligations.
He charged the new board to uphold high standards of corporate governance, transparency and regulatory compliance, while prioritising prompt claims settlement, sound solvency management and prudent business practices.
Industry stakeholders view the successful rehabilitation of African Alliance as a test case for regulatory intervention in Nigeria’s insurance sector, particularly at a time when operators are under pressure to strengthen their capital base, improve governance standards and rebuild public confidence.
During its tenure, the NAICOM appointed an interim board to restore liquidity through the recovery of trapped dividend funds and other inflows, settled a significant portion of annuity arrears and legacy claims, facilitated the transfer of the company’s annuity portfolio, completed forensic and actuarial reviews and addressed several regulatory and operational challenges.
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