IN SHORT: African banks crossed $107 billion in total revenues in 2025 for the first time, with a 19% return on equity nearly double the global average of 10%, according to McKinsey’s landmark “From Potential to Performance” report. Five markets, South Africa, Nigeria, Egypt, Morocco and Kenya, account for 70% of those revenues.
Africa’s banking sector has crossed $100 billion in revenues for the first time, reaching an estimated $107 billion in 2025, with profitability at nearly double the global average, according to a comprehensive McKinsey report that also flags the heavy concentration of gains in five markets and a cost structure that remains twice the global norm.
The milestone, confirmed in McKinsey’s “From Potential to Performance” report released on March 31, marks a structural inflection point for African financial services after years of framing the continent’s banks as potential rather than proven performers.
- Africa’s banking revenues grew at a compound annual rate of approximately 17% between 2020 and 2024 in constant currency terms, compared with a global average of 7%. In US dollar terms, however, growth was a more modest 5.2% annually due to sharp exchange-rate depreciations across several markets, rising from $81 billion in 2020 to $99 billion in 2024 before accelerating to 7% growth in 2025.
- Return on equity stood at 19% in 2024, compared with a global banking average of approximately 10%, and is expected to ease to 17% in 2025. Higher interest rates, rapid loan repricing and substantial foreign exchange gains drove the outperformance, particularly in Nigeria where the top five banks generated more than $1.7 billion in FX gains following the 2023 exchange rate liberalisation.
- South Africa leads with $26.4 billion in customer-driven revenues in 2024, more than a quarter of the continental total. Nigeria, Egypt, Morocco and Kenya complete the top five. Together they generate roughly 70% of Africa’s banking revenue, leaving the remaining 30% distributed across 49 countries.
- McKinsey notes that these strong returns are largely driven by favourable external factors including elevated interest rates and FX gains, rather than improvements in operational efficiency. African banks carry a cost-to-assets ratio of 2.6%, double the global average of 1.3%, a structural drag that must be addressed for the profitability run to be sustainable.
- Nigerian fintechs OPay and Moniepoint have now scaled to rival traditional banks in user adoption, with OPay surpassing 50 million downloads and Moniepoint ranking among the continent’s leading merchant acquirers. The Nigerian central bank has raised minimum capital requirements fivefold for international banks and tenfold for national banks, a recapitalisation wave that will reshape the market by 2026.
- Lending remains the backbone at just over $30 billion in revenues in 2024, projected to reach $52 billion by 2030. SMEs are the fastest-growing segment at 8% annually. Digital banking and payments are expanding rapidly, with fee and commission income growing 1.8 percentage points faster than interest income between 2020 and 2024.
- Smaller markets are growing faster than the top five, with McKinsey identifying new frontiers opening across francophone West Africa, East Africa beyond Kenya, and Southern Africa beyond South Africa.
The McKinsey data establishes Africa’s banks as a genuine global profitability story, not just a developmental aspiration. For institutional investors who have historically avoided African financial sector exposure, the numbers now demand attention.
The Bigger Picture: African banking’s $107 billion revenue milestone is not just a headline. It is a proxy for the financial deepening of a continent with 1.4 billion people, the world’s youngest population and a rapidly growing middle class. The five-market concentration means the story is not evenly distributed, but it also means there is enormous runway in the 49 countries that collectively account for just 30 cents of every dollar. The next decade of African banking growth will come from extending the model into underserved markets, SME credit, digital payments and insurance. Banks that move first will capture outsized returns. The data is already pointing the way.
Source: Reuters / McKinsey / Ecofin Agency
