Africa’s banks press ahead with costly acquisitions despite weak earnings and uneven markets, financeinafrica.com has reported.
Africa’s largest banks spent more than $537 million on expansion deals in 2025, pressing ahead with9 acquisitions even as tougher regulation, challenging macroeconomic conditions and uneven earnings weighed on the sector.
Details from official bank statements and media reports show that five major lenders deployed at least $536.7 million to seven strategic transactions during the year, ranging from full bank buyouts to minority stakes and fintech investments, as they sought to deepen offerings and solidify their positions in the region.
South African banks accounted for the bulk of deal value, with FirstRand, Nedbank and Capitec together spending about $396.5 million.
Elsewhere, expansion was limited. Nigeria’s activity was driven largely by Access Bank – its biggest lender by assets, which led on geographic reach with four cross-border acquisitions, three valued at more than $125 million, while Kenya saw a single major mover, with KCB agreeing to acquire a 75% stake in Riverbank Solutions for a reported $15 million.
The headline figure, however, captures only transactions with published or estimated values. Several additional deals announced during the year by the reviewed banks and their rivals had no price attached, pointing to a broader but less transparent regional dealmaking push.
The acquisitions came against a backdrop of mixed financial results in the first half of 2025, with Access Bank and Nedbank reporting declines in profit after tax despite higher gross income.
Meanwhile, KCB and Capitec posted strong bottom-line earnings of 8% and 23%, respectively. FirstRand, which reports its full-year performance in June, also delivered improved results, supported by growth across its business franchises and tighter financial discipline.
Additionally, banks faced a more constrained operating environment marked by inflation risks, foreign-exchange volatility, and global trade and geopolitical tensions.
The slower pace of bank expansion across Nigeria and Kenya in 2025 coincided with sweeping recapitalisation programmes aimed at strengthening financial stability.
In March 2024, the Central Bank of Nigeria (CBN) raised minimum capital requirements for commercial, merchant and non-interest banks as part of a broader push to boost the sector’s resilience.
Under the new framework, commercial banks with international licences must hold a minimum share capital of N500 billion, up from N50 billion, with compliance required by March 31, 2026.
Banks are permitted to meet the threshold through fresh equity raises — including public offers, rights issues and private placements — as well as mergers, acquisitions or licence downgrades. Unlike the 2005 recapitalisation exercise, however, lenders are barred from using retained earnings to boost buffers.
The announcement triggered a wave of fundraising, but early compliance was limited. Access Bank emerged as the only lender to meet the revised requirement in 2024 after raising N351 billion via a public offer, giving it greater strategic flexibility than most peers.
For the rest of the industry, the narrowing compliance window intensified capital mobilisation in 2025. Banks raised about N800 billion ($523 million) in the first seven months of the year, according to Agusto & Co.
By November, the CBN said 16 banks had met the new paid-up capital levels, while 27 were in different stages of mobilisation.
Kenya adopted a similar approach last December when it introduced the Business Laws (Amendment) Act, 2024, as authorities stepped up efforts to create stronger banks.
The new rule requires lenders to raise core capital to KSh10 billion by 2029 from KSh1 billion, with phased increases starting at KSh3 billion in 2025. Data from the Central Bank of Kenya (CBK) shows 27 of Kenya’s 39 banks had met the 2025 threshold, with most holdouts concentrated among smaller tier-three lenders.
Earlier in June, at least seven Nigerian banks were ordered by the CBN to suspend “foreign investments in subsidiaries or offshore ventures” until they exit their credit and single obligor forbearance exposure, highlighting increased regulatory oversight in the sector.
Analysts expect the recapitalisation push across the region to result in fewer but better-capitalised banks, with consolidation among weaker players strengthening liquidity and resilience over time.
Access Holdings Plc completed four cross-border acquisitions in 2025, three of which were valued at a combined $125 million, reinforcing the group’s aggressive regional expansion strategy.
The largest transaction was the acquisition of National Bank of Kenya from KCB Group for $109.6 million, disclosed in the bank’s H1 2025 report. Access Bank also completed the purchase of Standard Chartered’s Consumer, Private and Business Banking operations in Tanzania for N13.9 billion, alongside its Gambia subsidiary for N9.4 billion ($6.2 million), under a broader deal framework initiated in 2022.
In July, the bank concluded a fourth deal, acquiring a 76% stake in Mauritius-based AfrAsiaBank Limited through its UK subsidiary. The transaction, first announced in November 2024, received regulatory approvals, though its value was not reported.
The expansion came amid weaker earnings, with H1 profit after tax falling 23.2% to N281.3 billion, even as total assets rose to N42.4 trillion and deposits reached N22.9 trillion.
