BNP Paribas Closes Unit in South Africa

BNP Paribas SA, the largest bank in France, has closed its corporate and investment banking (CIB) division in South Africa, marking another step in the retreat of European banks from the African continent. The move is part of a broader trend where European financial institutions are scaling back their presence in Africa.

A spokesperson for BNP Paribas confirmed the closure, stating that the South African central bank withdrew the French lender’s authorisation to “conduct the business of a bank by means of a branch,” effective March 8, 2024. The approval for the bank’s exit from the South African market came in April.

BNP Paribas joins other European banks, including Barclays Plc and Standard Chartered Plc, in reducing their footprint in Africa. Similarly, Societe Generale SA (SocGen), another major French bank, has been scaling back its operations on the continent and recently announced the sale of two more of its African units.

The ongoing exits by French and other European banks from Africa open opportunities for emerging pan-African banking groups to expand. A report from Fitch Ratings suggests that this shift could benefit local banking sectors by stimulating competition and fostering growth, despite potential short-term challenges.

The departure of these major European banks is likely to lead to a restructuring of the African banking landscape, as regional banks and financial institutions look to fill the gaps left by their European counterparts. As the transition continues, observers will be watching for new partnerships, mergers, and acquisitions that could shape the future of banking in Africa.