Fitch forecasts growing role of African banks’ foreign subsidiaries
In Ghana, rating agency Fitch Ratings forecasts in a new report a further increase in the contribution of foreign subsidiaries of African banking groups to net profit and total assets in the medium term. This was reported by MyJoyOnline.
Growth after the pandemic
According to Fitch Ratings, the role of foreign units of African banking groups has grown over the past decade, and this trend accelerated after the pandemic. The agency cites asset acquisitions and, for Nigerian banking groups, the devaluation of the Nigerian naira among the factors.
According to Fitch, Access Bank Plc has shown the fastest cross-border expansion in recent years. The agency assigns the bank a B rating with a stable outlook.
Opportunities for expansion
Fitch notes that Kenya is attracting new banking market participants from both Nigeria and South Africa. The reduced presence of European banks in Africa has created opportunities for African banking groups to expand, primarily in French-speaking countries of West Africa.
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The agency also expects new paid-up capital requirements in African countries to continue supporting mergers and acquisitions. At the same time, Moroccan banking groups are an exception: the contribution of their foreign subsidiaries has declined in recent years due to a lack of acquisitions and strong growth in the domestic market.
Fitch explained cross-border expansion by banks’ desire to support clients doing business in several countries, as well as to capitalize on opportunities from the African Continental Free Trade Area, economic growth and expanded financial inclusion. Such expansion is also expected to diversify domestic risks: banking groups in South Africa, Nigeria and Kenya have faced macroeconomic difficulties in their countries over the past decade.
Fitch rates 12 of the 14 banking groups reviewed in the report. These groups have subsidiaries in at least five African countries, and their consolidated total assets exceeded $15 billion at the end of 2025.
