Africa’s banking industry generated about $107 billion in revenue in 2025, with Nigeria weakly positioned as the continent’s third-largest market.
A report by McKinsey and Company shows that about 70 per cent of the industry’s revenue is concentrated in five key markets, led by South Africa, which accounts for 26.4 per cent of total earnings, followed by Egypt with 18 per cent.
The report examined historical data up to 2024, estimated data for 2025 and projections up to 2030.
Nigeria contributed 8.7 per cent to place in a distant third position. Morocco and Kenya complete the top five, underscoring the concentration of African banking business in a few countries.
The report noted that while the leading markets are expected to maintain their dominance, smaller ones are beginning to post double-digit growth, signalling the emergence of new frontiers in Africa’s banking landscape.
Another report that reviewed Africa’s top 100 banks last year shows how Nigerian institutions stack up against their continental peers, underlining both strengths and limitations.
South Africa’s Standard Bank Group remains the largest bank on the continent by Tier 1 capital, followed by the National Bank of Egypt in second place and Morocco’s Attijariwafa Bank in third, reflecting the huge dominance of North and Southern African lenders.
Among Nigerian lenders, Access Bank is the highest ranked on the continent, coming 14th in the overall list and making it the biggest bank in sub Saharan Africa outside South Africa, according to the African Business ranking.
Nigerian banks such as Zenith Bank and FBN Holdings also feature within the top tiers of the list, highlighting the significant footprint of Nigeria’s banking sector in Africa.
Within this competitive mix, Nigerian banks are emerging as some of the most profitable players on the continent, outperforming African averages on the back of foreign exchange volatility, high interest rates and rapid digital expansion, even as currency pressures weigh on growth in dollar terms.
According to McKinsey, despite macroeconomic shocks, Nigeria’s banking sector has maintained strong profitability, driven by repriced loans, elevated interest rates and significant income from foreign exchange transactions.
The country’s banking market is projected to grow at about seven per cent yearly to reach roughly $16 billion (about N24 trillion) by 2030.
The organisation said the performance reflected a maturing market where traditional banking strengths are being reshaped by digital disruption and intensifying competition.
“Despite currency volatility, Nigerian banks are highly profitable, surpassing the African average,” the report stated.
Between 2019 and 2024, corporate banking contributed the largest share of new revenue growth in Nigeria, but retail and small business segments expanded faster, supported by digital payments and agency banking that have opened up previously underserved markets.
The report also highlighted the growing importance of micro, small and medium-sized enterprises, noting that MSMEs are becoming a key driver of retail banking growth as financial institutions deepen lending and expand tailored offerings to capture the segment.
Increased access through digital channels and agency networks has further accelerated inclusion for small businesses nationwide.
Nigeria’s banking landscape is becoming increasingly competitive, with fintech firms such as OPay and Moniepoint evolving into major players that now rival traditional banks in customer adoption and service offerings. The platforms provide savings wallets, payment tools and business services, creating ecosystems that attract individuals and small businesses.
In response, traditional banks are ramping up investment in technology, with industry data showing billions of naira spent yearly on software and digital banking infrastructure to retain customers and defend market share.
A major boost to earnings came in 2023 following the liberalisation of the foreign exchange market, when the top five banks recorded more than $1.7 billion in FX gains, accounting for about 40 per cent of their total operating income and marking a sharp increase from the previous year.
However, the report cautioned that while local currency performance has been strong, depreciation of the naira has reduced growth when measured in U.S. dollar terms, masking the sector’s underlying expansion.
It also pointed to a gradual consolidation in the industry, with the largest banks increasing their share of domestic assets from 59 per cent to 64 per cent within five years, a trend expected to continue as regulators push for stronger capital bases and resilience.
