African banking revenues have surpassed $100 billion for the first time, reaching $99 billion in 2024 and an estimated $107 billion in 2025, according to new analysis from McKinsey & Company.

The sector is also among the most profitable in global banking, McKinsey’s new report shows.

African banks recorded returns on equity of 19 per cent in 2024 and an estimated 17 per cent in 2025, compared with a global banking average of about 10 per cent.

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Mayowa Kuyoro, Partner and Head of McKinsey’s Financial Services Practice in Africa, said that African banking has moved decisively from a story of potential to one of performance.

"The sector is delivering strong profitability while expanding access to financial services across one of the world’s fastest growing regions,” he said.

Between 2020 and 2024, banking revenues across Africa grew rapidly. On a constant-currency basis the sector expanded at approximately 17 per cent annually over the period.

In US dollar terms, growth was more moderate at around 5.2 per cent annually due to exchange-rate volatility across several markets.

According to the report, a combination of structural forces is supporting growth in the sector. These include rising financial inclusion, rapid adoption of digital financial services, and increasing demand for banking across a young and urbanizing population.

Africa’s population expanded by more than 2 per cent annually between 2020 and 2025, while the working-age population grew by nearly 3 per cent per year.

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Concentration problem

Despite the growth of new markets, African banking remains concentrated. Egypt, Kenya, Morocco, Nigeria, and South Africa together generate around 70 per cent of banking revenues across the continent.

South Africa remains the largest banking market in Africa. Client-driven banking revenues in the country reached approximately $26.4 billion in 2024.

Lending continues to be the largest revenue pool in African banking. It generated just over $30 billion in 2024 and is projected to reach around $52 billion by 2030 as credit demand expands.

Small and medium-size enterprises are expected to become the fastest-growing customer segment.

SME banking revenues are projected to grow at around 8 per cent annually through 2030.

"The next phase of competition will be defined by how banks scale digital capabilities, develop new revenue streams beyond traditional lending, and innovate to compete,” Kuyoro noted.