(JUBA) – Standard Bank Group, Africa’s largest lender by assets, is evaluating a possible entry into Ethiopia as it seeks to expand its regional footprint while navigating restrictions on foreign ownership in the country’s banking sector.
Through its East African subsidiary Stanbic Bank, the group is considering a greenfield approach in Ethiopia, which would allow it to establish a new operation from the ground up and retain full ownership, rather than taking a minority stake under the country’s 49 percent foreign ownership limit for banks.
Stanbic Bank regional chief executive Joshua Oigara said the group generally prefers majority control in new markets, making minority ownership less attractive at entry stage.
He noted that Ethiopia does not prevent foreign financial institutions from setting up wholly owned operations through greenfield investment, a route already used by other regional firms entering the market.
The bank is closely watching developments in Ethiopia’s financial sector, which has recently begun opening to foreign participation after years of state dominated banking. Oigara pointed to early experiences of regional companies entering the Ethiopian market, noting that while profitability is not yet fully established, there is clear progress in market development.
He added that investment decisions should be viewed over a longer horizon, arguing that short term performance often underestimates the potential of emerging African markets.
The remarks come as regional banks continue to assess expansion strategies in Ethiopia, where regulatory limits and market conditions remain key considerations for investors seeking entry into one of Africa’s largest untapped financial markets.
In South Sudan, Stanbic Bank has also raised concerns over new recapitalisation requirements imposed on the banking sector, which require lenders to meet a minimum capital threshold of US$25 million by June 2026, rising to US$30 million by December 2026.
At an exchange rate of SSP 5,800 per US dollar, the requirements are equivalent to about SSP 145 billion and SSP 174 billion respectively.
Stanbic Bank has operated in South Sudan since 2012, but management says the current economic conditions have not improved in line with the proposed capital increases.
The lender argues that the domestic economy continues to face structural challenges, including inflationary pressures and limited access to foreign currency, which have affected banking operations across the sector.
The bank has told regulators that it does not currently see a strong case for additional capital injections under present market conditions, suggesting that liquidity constraints and macroeconomic instability continue to weigh on financial performance.
Across its wider African operations spanning 21 markets, Stanbic Bank reports that credit risk conditions are tightening in several economies.
The most significant pressure is being observed in Kenya, where credit loss ratios have moved into double digit levels, compared with historical single digit averages.
The bank attributes this trend to weaker underwriting conditions in parts of the market, despite continued growth in entrepreneurial activity and lending demand.
Management says capital allocation is increasingly being directed towards sectors that demonstrate stronger links to real economic output and export oriented activity, which tend to show lower default rates and greater resilience.
In Kenya, Stanbic Bank has continued to participate in large scale financial transactions, reflecting growing activity in corporate and investment banking.
In 2025, the bank was involved in arranging Kenya’s US$1.5 billion sovereign debt refinancing, as well as supporting major corporate fundraising, including a US$155 million corporate bond issuance.
The bank expects continued deal activity in 2026 across energy, oil and gas, infrastructure and trade finance sectors, where demand for structured financing remains strong.
Recent projects include involvement in the securitisation of Kenya’s Roads Maintenance Levy, as well as financing support for Uganda’s crude oil pipeline development, reflecting the group’s broader regional investment strategy.
Stanbic Bank says its pipeline remains supported by its structuring capabilities and investment banking expertise, even as regional economies face rising financial and geopolitical uncertainty.
The lender maintains that despite short term volatility, long term growth prospects across East Africa and the wider continent remain strong, particularly in infrastructure and energy linked sectors.