French bank Societe Generale is reportedly making a decision to exit its operations from the Ghanaian market, according to multiple media reports.
The bank initially entered Ghana in 2003 by acquiring a 51 percent stake in the then Social Security Bank.
As reported by theaccratimes.com, after operating in Ghana for about 20 years, the bank is also planning to withdraw its operations in two other African countries, specifically Cameroon and Tunisia.
Sources close to the bank mentioned in the report stated that Societe Generale has engaged the services of investment bank Lazard to seek potential buyers for its operations in Ghana, Cameroon, and Tunisia.
The report also mentioned that Societe Generale recently finalized agreements with Saham Group to sell its Moroccan operations, and in 2023, the French bank divested its interests in several African countries, including Congo, Equatorial Guinea, Mauritania, Burkina Faso, and Chad.
According to the bank's website dated April 12, 2024, the Societe Generale group, with its longstanding presence in Africa, aims to focus its resources on markets where it can establish itself as a leading bank, in line with the group's overall strategy.
However, Fitch Ratings has indicated that the French bank's planned exit from some African countries is expected to provide emerging pan-African banking groups with significant opportunities to grow, either organically or through mergers and acquisitions.
"This should stimulate competition and benefit local banking sectors despite some short-term challenges," Fitch stated on its website on April 26, 2024.
The withdrawal of some European banks in Africa is primarily attributed to increased competition, high cost-to-income ratio, reduced returns on investments, regulatory requirements, among other factors.
Credit: ghanaweb.com