French Bank Société Générale Exiting Ghana Market

On May 4, 2024, Société Générale, a French bank, made the decision to withdraw from the Ghanaian market after twenty years of operation. Alongside Ghana, the bank has also chosen to exit operations in two other African countries: Tunisia and Cameroon.

Société Générale initially entered the Ghanaian market in 2003 by acquiring a 51% stake in the then Social Security Bank. Over the past two decades, it has navigated the challenges faced by the financial sector, demonstrating resilience during its 20th-anniversary celebration last year. However, the bank has now decided to focus its resources on markets where it can establish itself as a leading financial institution, aligning with its overall strategy. Sources close to the bank reveal that Société Générale has enlisted the services of investment bank Lazard to seek potential buyers for its operations in Ghana, Cameroon, and Tunisia. Absa Bank is reportedly considering the acquisition of these subsidiaries. Weeks ago, Société Générale finalized agreements with Saham Group to sell its Moroccan operations, further streamlining its portfolio.

Société Générale’s planned exit mirrors similar actions taken by other European banks. Notable names include Barclays and Standard Chartered. While Standard Chartered has withdrawn from some countries, it continues to maintain operations in Ghana and a few other African countries. Additionally, newer entrants like Atlas Mara have also left the continent, while Credit Suisse is retaining only its South African operation. French bank Groupe BPCE exited its non-core businesses in several African countries as far back as 2018. The departure of European banks from Africa, including Société Générale, is primarily attributed to the high cost-to-income ratio. These banks are facing reduced returns on their investments in Africa compared to decades ago. The banking landscape has evolved, requiring significant investments in IT infrastructure and compliance to meet regulatory requirements set by central banks. Many African central banks have also increased minimum capital requirements over time. Furthermore, increased competition in the sector combined with stagnant economic growth in many African countries has further squeezed profit margins

As European and other non-African banks exit, African banks – particularly those from South Africa and Nigeria – may emerge as dominant players in the continent’s banking sector. The dynamics are shifting, and the financial landscape continues to evolve. Société Générale’s departure from Ghana marks a significant moment in this ongoing transformation.