As per a McKinsey study, African banks are generating higher returns than their peers in North America, Europe, Asia, and the Middle East, with the continent’s financial systems becoming deeply embedded in economic activity. The shift is also creating a larger pool of capital for activities like lending, payments, business expansion, and financial inclusion.
“African banking has moved decisively from a story of potential to one of performance,” said Mayowa Kuyoro, partner and head of McKinsey’s financial services practice in Africa, while interacting with The Independent.
According to McKinsey’s latest African banking review, African banks generated a return on equity of 19% in 2024, the highest of any major banking region in the world. The region was followed by Latin America (at 16.3%), the Middle East (at 13.6%), Europe (at 10.9%), North America (at 10.3%), Asia excluding China (at 9.3%), and China (at 8.7%).
“Africa’s banking sector produced returns nearly double the global average of 10.1% and almost nine percentage points above North America, home to some of the world’s largest financial institutions. Banking in the continent improved return on equity by 9.7 percentage points between 2020 and 2024, the largest increase recorded by any region globally. Europe registered the second-largest improvement at 8.2 percentage points, followed by the Middle East at 6.9 percentage points and Latin America at 6.1 percentage points,” McKinsey noted.
“The numbers suggest African banking is becoming one of the strongest-performing segments of the global financial industry. On a constant-currency basis, African banking revenues expanded at 17.3% annually between 2020 and 2024. That was faster than Latin America at 16.3%, the Middle East at 14.5%, Asia excluding China at 8.9%, Europe at 8%, North America at 5.4%, and China at 4.6%. Recent earnings reports suggest the profitability trend has continued into 2026 across several of the continent’s largest banking markets,” the agency stated further.
Breaking down the data further, let’s start with South Africa, where Standard Bank reported an 11% increase in headline earnings for 2025, supported by stronger fee income, trading revenues, and lower credit impairments. Capitec, one of the country’s fastest-growing lenders, recorded a 23% rise in annual profit as interest income continued to expand.
In East Africa, Kenya’s KCB Group reported a 15% increase in first-quarter pretax profit in 2026, while Equity Group posted a 52% jump in full-year 2025 pretax earnings. The data shows one thing: strong banking performance is being sustained across multiple markets, despite headwinds like uneven economic conditions and currency volatilities in several countries.
At the continental level, as per McKinsey, African banking revenues surpassed USD 100 billion for the first time in 2025, reaching an estimated USD 107 billion. The sector is further consolidating and building upon these gains by mobilizing capital, supporting payments, and extending financial services to a growing customer base.
In Egypt, banking revenues reached USD 18 billion in 2024 as financial inclusion expanded rapidly and digital payment platforms attracted millions of users. More than three-quarters of eligible Egyptians now reportedly have access to formal financial services.
In Kenya, banks are increasingly using transaction data generated through mobile money platforms to support lending and customer acquisition. Six of the East African country’s largest banks recorded returns on equity above the continental average in 2024.
“While Nigeria’s banking sector has remained profitable despite major currency reforms and macroeconomic volatility, Morocco continues to improve efficiency and digital service delivery across a highly concentrated banking market. Beyond the largest economies, countries such as Tanzania and Cote d’Ivoire are recording some of the fastest banking growth rates on the continent, indicating that financial deepening is spreading beyond traditional banking centers,” McKinsey noted.
“Africa was one of the few major regions where financial sector revenues increased as a share of GDP between 2020 and 2024. The continent recorded a 0.4 percentage-point gain during the period, while North America, China, and the Middle East all experienced declines. The data suggests banking is becoming more deeply integrated into economic activity across the continent. At the same time, banks are becoming less dependent on traditional lending. Fee income from payments, cards, insurance, and transaction services grew faster than interest income between 2020 and 2024. Payments in particular have emerged as one of the fastest-growing business lines as digital finance expands across African markets,” the agency concluded.