TGB Regional Banking Monitor: Sub-Saharan Africa — Q4 2024

The regional picture

The IMF's Regional Economic Outlook of April 2025 estimated sub-Saharan Africa's growth at 4.0% in 2024, up from 3.6% in 2023. It expected growth to ease to 3.8% in 2025 and 4.2% in 2026, downward revisions of 0.4 and 0.2 percentage point, reflecting lower external demand, subdued commodity prices and tighter financial conditions. Median headline inflation in the region was about 4.5% in February 2025, against 6.5% at the end of 2023.

For banks, the IMF's assessment was that the banking system appears generally stable and well capitalised, with pockets of vulnerability. It singled out low-income and fragile countries, where high non-performing loans and increasing reliance on domestic public debt have increased bank exposure to sovereign risk. The IMF said efforts to draw on domestic markets had increased the exposure of bank balance sheets to sovereign risk, and that the median interest-to-revenue ratio climbed to more than 12% in 2024. That combination ties bank solvency more closely to public finances.

Monetary policy diverged. In South Africa, the SARB cut its repo rate by 25bp to 7.75% on 21 November 2024. The Central Bank of Kenya lowered its rate to 12.00% on 8 October 2024 and to 11.25% on 5 December 2024. The BCEAO held the West African Economic and Monetary Union (WAEMU) policy rate at 3.50% on 4 December 2024. At the high end of the range, the Bank of Ghana held its rate at 27.0% on 29 November 2024, and the Central Bank of Nigeria retained its MPR at 27.50% in February 2025.

The first half of 2025 widened the gap. Kenya cut three more times, to 9.75% on 10 June 2025, and the BCEAO cut by 25bp to 3.25% with effect from 16 June 2025. South Africa cut once more, in May, taking the repo rate to 7.25%. Ghana raised its rate by 100bp to 28.0% on 28 March 2025, and Nigeria retained 27.50% again in May 2025.

Policy rates in the monitor's five systems

Source: South African Reserve Bank, Statement of the Monetary Policy Committee, 21 November 2024, 21 November 2024; South African Reserve Bank, Statement of the Monetary Policy Committee, 29 May 2025, 29 May 2025; South African Reserve Bank, Statement of the Monetary Policy Committee May 2025 (web page), 29 May 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 8 October 2024, 8 October 2024; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 5 December 2024, 5 December 2024; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 10 June 2025, 10 June 2025; Central Bank of West African States (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 décembre 2024, 4 December 2024; Central Bank of West African States (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 juin 2025, 4 June 2025; Bank of Ghana, Monetary Policy Committee Press Statement No 121, 29 November 2024, 29 November 2024; Bank of Ghana, MPC Press Release - January 2025 (122nd MPC meeting), 27 January 2025; Bank of Ghana, Monetary Policy Committee Press Release, 28 March 2025, 28 March 2025; Bank of Ghana, Monetary Policy Committee Press Release, 23 May 2025, 23 May 2025; Central Bank of Nigeria, Monetary Policy Decisions, 20 May 2025.

The Central Bank of Nigeria's published list of decisions shows the MPR at 27.25% after its September 2024 meeting and at 27.50% when it was retained in February 2025, so the rate rose by 25bp between those two meetings, for which the list carries no entry.

South Africa: easing slowly, banks well capitalised

The SARB's November 2024 cut was unanimous, and came with headline inflation at 2.8% in October 2024, below the target range. The committee was more divided in 2025. On 30 January it cut by a further 25bp with effect from 31 January 2025, with four members in favour and two preferring no change. On 20 March it held the rate at 7.5%, with four members for the hold and two for a 25bp cut. On 29 May it cut by 25bp with effect from 30 May 2025, with five members in favour and one preferring a 50bp cut, leaving the repo rate at 7.25%. Inflation had slowed to 3% in December 2024 and averaged 4.4% over 2024, and the SARB said it was below 3% again in April 2025, with core inflation at 3%. In May the committee also considered a scenario with a 3% inflation objective, and the SARB said internal and external analysis had shown its inflation target to be too high and too wide.

Prudential indicators

The SARB's Financial Stability Review of June 2025 shows capital ratios slightly below their 2023 levels, impaired advances broadly stable and return on equity higher. Loans and advances grew 5.28% in 2024, after 7.40% in 2023, and the five largest banks held 92.35% of sector assets.

South African banking sector indicators (annual averages, %)

Source: South African Reserve Bank, Financial Stability Review, First edition 2025, 19 June 2025.

The SARB's table was updated on 26 May 2025, and its figures are averages for each year, with 2025 covering the year to March. The review judged that conditions in 2025 have been more challenging, mainly because of a surge in policy uncertainty linked to trade conflicts. It said prudentially regulated institutions remained resilient, partly because of adequate capital buffers, but that downward revisions to the growth forecast will likely test this resilience. Its heatmap points to banks' sovereign exposure, government debt and interest payments, net portfolio purchases by non-residents and household financial strain as the most notable build-up of imbalances. Household and SME financial distress is one of the six key risks the review identifies. One risk eased: a FATF statement of 13 June 2025 confirmed that South Africa had addressed or largely addressed all 22 action items set after its February 2023 greylisting. ### Large-bank results Standard Bank, Absa and Nedbank all lowered their credit loss ratios in 2024, and each reported ROE of at least 14.8%. Standard Bank's Africa Regions franchise contributed 41% of group headline earnings at an ROE of over 28%.

South African banking groups, 2024 results

Source: Standard Bank Group, 2024 Annual Results Booklet, 13 March 2025; Absa Group, Absa Group Reports 10% Increase in 2024 Earnings after Material Second-Half Recovery, 11 March 2025; Nedbank Group, 2024 Annual Results Booklet, 4 March 2025; Nedbank Group, Nedbank delivers improved financial performance. Positions itself for growth with realignment of business banking and wealth divisions, 4 March 2025.

With sector loan growth slowing to 5.28% in 2024, lower credit loss ratios at all three groups were an important support to earnings. Absa's ROE remained below the 16% target it aims to reach by 2026.

Nigeria: the tightest stance, recapitalisation under way

The Central Bank of Nigeria raised its MPR by 50bp to 27.25% from 26.75% at its meeting of 23 and 24 September 2024, and lifted the cash reserve ratio for deposit money banks to 50.00% from 45.00%. At its meeting of 19 and 20 February 2025 it retained the MPR at 27.50%, the asymmetric corridor at +500/-100bp, the cash reserve ratio at 50.00% for deposit money banks and 16% for merchant banks, and the liquidity ratio at 30.00%. It retained the MPR at 27.50% again on 19 and 20 May 2025. The IMF put Nigeria's 2024 growth at 3.4%.

Large banks still reported higher 2024 earnings. Guaranty Trust Holding Company (GTCO) reported profit before tax of N1.266 trillion, up 107.8% from N609.3 billion in 2023. Its capital adequacy ratio closed 2024 at 39.3%, while IFRS 9 Stage 3 loans rose to 5.2% at group level from 4.2% and cost of risk to 4.9% from 4.5%. The group said it had provided for all its forbearance loans ahead of the June 2025 timeline and had fully accrued for the windfall tax. Access Holdings reported profit before tax of N867.0 billion, up 19%, and profit after tax of N642.2 billion. Its total assets rose 55.5% to N41.498 trillion. International subsidiaries contributed 48.5% of the banking segment's profit before tax.

Nigerian banking groups, 2024 results

Source: Guaranty Trust Holding Company Plc, GTCO Plc Releases 2024 Full Year Audited Results...Pays Shareholders Record Dividend of N8.03k for 2024 Financial Year, 31 March 2025; Access Holdings Plc, Press release: Access Holdings Records 88% Growth in Gross Earnings to N4.878 Trillion, 16 April 2025.

Recapitalisation is the structural theme. Access Holdings said that in 2024 it became the first institution to meet the Central Bank of Nigeria's recapitalisation directive, raising N351 billion through a rights issue. The gap between Access's 19% profit growth and GTCO's 107.8% shows how unevenly 2024 earnings growth was spread across large Nigerian banks. Rising Stage 3 ratios at GTCO, together with the June 2025 forbearance timeline, point to asset quality as the area to watch through 2025.

Kenya: deep cuts, slow pass-through, rising bad loans

Of the five systems covered here, Kenya eased the most. The Monetary Policy Committee cut the Central Bank Rate to 12.00% on 8 October 2024 and to 11.25% on 5 December 2024. On 5 February 2025 it cut by 50bp to 10.75% and reduced the cash reserve ratio by 100bp to 3.25%. It cut by 75bp to 10.00% on 8 April 2025, when it also narrowed the interest-rate corridor around the CBR from ±150bp to ±75bp, and by 25bp to 9.75% on 10 June 2025. From the October 2024 decision to June 2025 the rate fell by 225bp.

Transmission to borrowers was slow. In December 2024 the committee observed that banks had not lowered their lending rates in proportion to the fall in short-term government securities rates. In February 2025 the CBK said that, under amendments to the Banking Act recently enacted by Parliament, banks that fail to pass on lower funding costs will be penalised. Average lending rates then fell from 17.2% in November 2024 to 15.8% in March 2025 and 15.4% in May 2025. Private-sector credit contracted by 1.4% in December 2024, which the CBK attributed mainly to exchange-rate valuation effects on foreign-currency loans after the shilling appreciated, and to reduced demand because of high lending rates. Foreign-currency loans, about 26% of the total, shrank by 11.4%, while local-currency loans grew 2.1%. Credit growth turned positive and reached 2.0% in May 2025, after -2.9% in January 2025. Inflation stayed low, at 3.0% in December 2024 and 3.8% in May 2025, while real GDP growth slowed to 4.7% in 2024 from 5.7% in 2023.

Asset quality deteriorated. The ratio of gross non-performing loans to gross loans was 16.3% in June 2024 and 16.4% in December 2024, then rose to 17.2% in February 2025 and 17.6% in April 2025. Increases between December and February came in real estate, personal and household, trade, building and construction, and manufacturing loans. The CBK nonetheless described the banking sector as stable and resilient, with strong liquidity and capital adequacy ratios, and said banks had continued to make adequate provisions for NPLs.

Structural change is also coming. The Business Laws (Amendment) Act, 2024 raised the minimum core capital requirement for commercial banks to Ksh10 billion. On 16 April 2025 the CBK announced that from 1 July 2025 it would lift the moratorium on licensing new commercial banks, in place since 17 November 2015, and that new entrants must meet the Ksh10 billion requirement.

Ghana: high inflation, high NPLs, capital being rebuilt

The Bank of Ghana held its policy rate at 27.0% in November 2024 and January 2025. Inflation had risen from 20.4% in August 2024 to 22.1% in October and 23.8% in December 2024. On 28 March 2025 the committee, by majority, raised the rate by 100bp to 28.0%. It held at 28.0% unanimously on 23 May 2025, after headline inflation had fallen to 21.2% in April 2025. In the year to 21 May 2025 the cedi appreciated 24.1% against the US dollar.

The banking sector grew quickly in nominal terms: assets rose 33.8% in 2024. The capital adequacy ratio with regulatory reliefs edged up to 14.0% in December 2024 from 13.9% a year earlier, and without reliefs it rose to 11.3% from 8.3%. The non-performing loan ratio increased to 21.8% in December 2024 from 20.6% in December 2023. Profits rose in 2024, but more slowly, so profitability indicators moderated. Average lending rates fell to 30.25% in December 2024 from 33.75% a year earlier.

Ghana banking-sector indicators, %

Source: Bank of Ghana, MPC Press Release - January 2025 (122nd MPC meeting), 27 January 2025; Bank of Ghana, Monetary Policy Committee Press Release, 28 March 2025, 28 March 2025.

In February 2025 the NPL ratio was 8.9% excluding fully provisioned loss-category loans, against 22.6% including them. The gap between the two NPL measures shows that much of the stock is already provisioned. The Bank of Ghana said in November 2024 that banks had accumulated enough capital buffers to withstand the external debt restructuring, with minimal impact from the Eurobond restructuring because of pre-emptive provisioning. It has said it will hold banks with capital gaps to their recapitalisation plans and will continue to monitor undercapitalised banks closely. Fiscal slippage is a further risk: the 2024 deficit on a commitment basis was 7.9% of GDP against a 3.8% target.

WAEMU: low inflation opens room to ease

The BCEAO's December 2024 meeting kept its main policy rate at 3.50% and its marginal lending rate at 5.50%, levels in force since 16 December 2023. Inflation was 3.4% in October 2024, above the 1% to 3% target. By the June 2025 meeting, inflation had fallen to 2.3% in the first quarter of 2025 from 2.9% in the fourth quarter of 2024. The committee cut both rates by 25bp from 16 June 2025, to 3.25% and 5.25%, and kept the reserve requirement at 3.0%. Credit to the economy grew 4.5% at end-December 2024 and 5.0% at end-March 2025. Bank liquidity strengthened in the first quarter of 2025 and the average interbank rate fell to 6.0%.

Cross-country comparison

Sub-Saharan Africa monitor: system indicators

Source: South African Reserve Bank, Financial Stability Review, First edition 2025, 19 June 2025; South African Reserve Bank, Statement of the Monetary Policy Committee May 2025 (web page), 29 May 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 5 February 2025, 5 February 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 10 June 2025, 10 June 2025; Bank of Ghana, MPC Press Release - January 2025 (122nd MPC meeting), 27 January 2025; Bank of Ghana, Monetary Policy Committee Press Release, 28 March 2025, 28 March 2025; Central Bank of Nigeria, Monetary Policy Decisions, 20 May 2025; Central Bank of West African States (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 juin 2025, 4 June 2025.

The comparison favours South Africa on asset quality, with impaired advances of 5.3%, against non-performing loan ratios of 16.4% in Kenya and 21.8% in Ghana at end-2024. In Kenya, the CBK described capital adequacy as strong while credit contracted, and it attributed the contraction mainly to exchange-rate valuation effects and weaker demand. No system-wide capital or asset-quality series for Nigeria or WAEMU was available from the sources used here.

Outlook risks

The IMF's concern about bank exposure to sovereign risk applies most directly to Ghana, where some banks still have capital gaps after debt restructuring, and it is also visible in the SARB's heatmap for South Africa. In Kenya, NPLs had risen to 17.6% by April 2025 even as rates fell, so lower rates have yet to improve repayment capacity. In Nigeria, the June 2025 forbearance timeline and recapitalisation will test banks operating with a 27.50% policy rate. In South Africa, the SARB itself expects weaker growth forecasts to test bank resilience. Across the region, the IMF's downgrade to 3.8% growth for 2025 sets a less supportive backdrop for loan books.

Primary sources: South African Reserve Bank, Statement of the Monetary Policy Committee, 21 November 2024, 21 November 2024; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 5 December 2024, 5 December 2024; Central Bank of West African States (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 décembre 2024, 4 December 2024; Central Bank of Nigeria, Monetary Policy Decisions, 20 May 2025; Bank of Ghana, MPC Press Release - January 2025 (122nd MPC meeting), 27 January 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 5 February 2025, 5 February 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 10 June 2025, 10 June 2025; South African Reserve Bank, Financial Stability Review, First edition 2025, 19 June 2025; Central Bank of West African States (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 juin 2025, 4 June 2025; Bank of Ghana, Monetary Policy Committee Press Release, 28 March 2025, 28 March 2025; International Monetary Fund, Regional Economic Outlook: Sub-Saharan Africa, April 2025 - Recovery Interrupted, 25 April 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 8 October 2024, 8 October 2024; Bank of Ghana, Monetary Policy Committee Press Statement No 121, 29 November 2024, 29 November 2024; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 8 April 2025, 8 April 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 29 May 2025, 29 May 2025; South African Reserve Bank, Statement of the Monetary Policy Committee May 2025 (web page), 29 May 2025; Bank of Ghana, Monetary Policy Committee Press Release, 23 May 2025, 23 May 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 30 January 2025, 30 January 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 20 March 2025, 20 March 2025; Standard Bank Group, 2024 Annual Results Booklet, 13 March 2025; Absa Group, Absa Group Reports 10% Increase in 2024 Earnings after Material Second-Half Recovery, 11 March 2025; Nedbank Group, 2024 Annual Results Booklet, 4 March 2025; Nedbank Group, Nedbank delivers improved financial performance. Positions itself for growth with realignment of business banking and wealth divisions, 4 March 2025; Guaranty Trust Holding Company Plc, GTCO Plc Releases 2024 Full Year Audited Results...Pays Shareholders Record Dividend of N8.03k for 2024 Financial Year, 31 March 2025; Access Holdings Plc, Press release: Access Holdings Records 88% Growth in Gross Earnings to N4.878 Trillion, 16 April 2025; Central Bank of Kenya, Press release: Lifting of moratorium on licensing of new commercial banks in Kenya, 16 April 2025.