BNP Paribas quits South Africa

[Nat Quinn]

BNP Paribas quits South Africa

 

BNP Paribas, the sixth-largest bank in the world, is no longer operating as a bank in South Africa. 

The French company, which has the Euro equivalent of R8.2 trillion in assets under management, began conducting business as a bank in South Africa in 2012, allowing it to offer corporate and investment banking services.

The group is now scaling back its non-core operations across Africa to focus on Europe and Asia instead.

In a government gazette signed by Prudential Authority and South African Reserve Bank Deputy Governor Nomfundo Tshazibana, BNP Paribas’s ability to conduct the business of a bank via a branch was withdrawn with effect from 8 March 2024.

Despite technically no longer operating as a bank in South Africa, BNP Paribas is still the owner of credit provider RCS.

While BNP Paribas is one of several international companies exiting South Africa, the narrative that investors are turning sour on South Africa may be exaggerated.

S&P Global said that this could be a significant boost for African banks. ‘Increasing competition among pan-African banking groups should boost credit growth.’

‘French-owned African subsidiaries are often unable to target certain segments of the economy due to their parent bank’s conservative risk appetite, and they follow more stringent loan classification and provisioning policies than locally owned banks.’

‘This can act as a drag on growth and profitability. Stricter capital management, with higher buffers over local minimum regulatory requirements, has also constrained subsidiaries’ lending. We expect credit growth to accelerate with the exit of French banks, albeit mainly in lower-risk segments, which will help preserve asset-quality metrics.’

 

SOURCE:BNP Paribas quits South Africa  – Daily Friend

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