The latest figures released in spring 2026 by a global consulting firm confirm that African banks posted a return on equity (ROE) of around 19% in 2024, compared with a global average of about 10%, and that this outperformance continued in 2025 with African ROE at roughly 17% while the rest of the world remained flat.This level of profitability puts the continent among the most profitable banking regions worldwide, even though its asset base and revenue pool remain smaller than those of the large developed markets.

The same analysis indicates that global banking revenues reached around  $5.9 trillion  in 2025, for a global ROE holding at about 10%, while Africa’s contribution remains modest in volume but dominant in terms of growth and relative profitability. The study stresses that this African outperformance rests on higher net interest margins, fast-growing fee income and a gradual improvement in asset quality.

Earlier work on banking productivity already showed that African banks posted cost-to-asset ratios between 4% and 5%, almost twice the global average, reflecting heavy operating structures and continued reliance on physical branches. At the same time, by 2017 the continent was already the world’s second most profitable banking region, with ROE close to  14.9% , just behind Latin America.  This continuity over time gives depth to today’s outperformance: it reflects less a one‑off rebound than a trajectory in which volume growth and risk pricing offset the efficiency gap.

“The story of African banking is no longer just one of emerging potential, but of proven performance, innovation, and resilience.” — Excerpt from McKinsey’s report on African banking, Consultancy.africa

Pan-African champions at the core of the trend

An academic paper published at the end of March 2026 on a sample of major pan-African groups shows that several North African institutions stand out for particularly strong and consistent profitability, maintaining robust ROE levels over 2018–2023 despite successive macroeconomic shocks. The sector study also highlights the specific weight of South Africa, which accounts for more than a quarter of the continent’s banking revenue pool, while facing intensifying competition from West and North African groups in trade finance and digital retail banking.

Analysts note that the rise of regional groups able to operate in more than ten countries each has created scale effects and risk diversification that directly support the continent’s aggregate ROE.  At the same time, these actors continue to face high operating costs and tighter capital requirements, which weigh on smaller institutions and fuel consolidation in several markets.

A fragile outperformance: costs, risk and inclusion

The latest Annual Report of the African Development Bank Group underlines that, despite resilient growth, the continent remains exposed to tight global financial conditions that increase the cost of capital and public debt servicing, in turn raising sovereign risk on banks’ balance sheets. Macroeconomic projections presented at the Bank’s Annual Meetings indicate that Africa’s growth path will largely depend on countries’ ability to strengthen resilience, notably by mobilising domestic savings and deepening financial systems.

Productivity studies emphasise that the combination of high costs and low banking penetration makes current outperformance vulnerable: without a step change in technological efficiency, competitive pressure from fintechs and telecom operators in payments and retail credit could erode interest and fee margins. The authors nevertheless point out that the continent’s rapid population growth and sustained urbanisation offer a unique growth pipeline for banks able to digitise their models and better serve SMEs.

The next test: towards 2030 amid consolidation and regulation

Forward-looking scenarios to 2030 foresee a more concentrated, more digital and more regionalised African banking sector, driven by progressive increases in capital requirements in several jurisdictions and by the expansion of cross‑border groups. In this setting, banks’ ability to keep ROE structurally above the global average will hinge on their capacity to cut operating costs, strengthen credit risk management and support the transformation of African economies towards more productive sectors. For investors and regulators alike, the message is clear: African banks’ outperformance is now documented, but preserving it will require a new phase of business‑model reform, more than just continued volume growth.