African banking revenues topped $100 billion for the first time in 2025, and the sector’s profitability ran well ahead of global rivals, according to a McKinsey report.
The consultancy put the industry’s return on equity (ROE), a key profit measure, at 19 percent in 2024 and 17 percent in 2025, against a global banking average near 10 percent. High interest rates, resilient lending and rising fee income drove the gains.
Revenues reached an estimated $107 billion in 2025, up from $99 billion in 2024. McKinsey said the sector has also deepened its economic role, lifting its share of gross domestic product (GDP) by 0.4 percentage points between 2020 and 2024.
Currency weakness is masking the true pace of growth, the report cautioned. Revenues grew about 17 percent a year in constant currency terms between 2020 and 2024, but only around 5 percent in dollar terms as several currencies weakened.
Growth also remains heavily concentrated. Five markets, South Africa, Egypt, Nigeria, Morocco and Kenya, generated roughly 70 percent of revenues in 2024. South Africa led with $26.4 billion, followed by Egypt at about $18 billion.
“African banking has moved decisively from a story of potential to one of performance,” said Mayowa Kuyoro, who leads McKinsey’s financial services practice in Africa.
The report expects regulation to spur consolidation in smaller markets. In Kenya, tougher central bank capital rules are likely to push smaller lenders toward mergers, while South Africa’s market is already dominated by four large banks.
McKinsey sees the next growth phase coming from technology and lending to underserved small and medium enterprises (SMEs), many of which lack access to formal credit. It estimates that generative artificial intelligence (AI) could add between $200 billion and $340 billion in annual productivity gains across global banking, with African lenders well placed to benefit.
Even so, McKinsey warned that holding these returns will require banks to manage currency swings, pursue scale through consolidation and invest in stronger data systems, or risk seeing profits drift back toward global averages.
