Continued economic expansion helping Côte d'Ivoire's banking sector grow


Supported by strong economic growth, the banking sector has expanded rapidly in recent years, financing public and private sector investment in reconstruction after the return of political stability in 2011. Profitability among the top-tier banks remains strong, with shareholders in publicly listed institutions benefitting from attractive dividends. These business opportunities have attracted a number of new players to the market, although these recent entrants are grappling to gain significant market share from the top six incumbents.

Although credit growth is expected to remain in double digits through 2020, regulatory reforms mean that the rate of expansion will moderate in the coming years. 2017 already saw the enforcement of more stringent capital requirements, while Basel II and III standards will be phased in from January 2018 (see analysis). These regulatory changes are expected to encourage consolidation in the banking sector, as smaller banks are acquired or merge so as to achieve critical mass.

Despite government efforts to promote financial inclusion in recent years, only 16% of the adult population has a bank account. Mobile banking has been going from strength to strength, however, allowing a larger share of the population to gain access to basic financial services (see analysis). “The advent of new technologies – such as mobile money – has substantially lowered our operational costs, but there is still a need for a physical presence with certain clients, to help build confidence and trust,” Mamadou Sanon, managing director of Coris Bank International, told OBG.

Sector Structure

As of July 2017 Côte d’Ivoire counted 27 banks in operation. While there have been a number of new entrants and a couple of exits in recent years, and significant competition for market share among second-tier banks, the market’s main players have remained relatively constant. Together, the top six banks accounted for just under 70% of banking assets as of July 2017. These were led by Société Générale Banque de Côte d’Ivoire (SGBCI), a French-owned bank with an 19% share of assets. The next five are bunched together in terms of their share of assets, so their precise ranking can fluctuate on the basis of particularly large lending transactions or balance sheet operations. In July 2017 Banque Atlantique (BACI), an Ivorian firm, was in second place with an 11% share of assets. It was followed by Pan-African entity Ecobank-CI and privately owned NSIA Banque (formerly BIAO), which are tied at 10%. Société Ivoirienne de Banque (SIB), which has been majority-owned by Attijariwafa, the Moroccan bank, since 2009 comes in fifth at 9%. Rounding out the top six is BICICI, the local subsidiary of the French financial group, BNP Paribas, with 8%. No other bank accounted for more than 7% of assets as of the middle of 2017, while four banks accounted for less than 1% each.


When Ivorian banks are considered together with their holdings in other African markets, one banking group, Atlantique Business International (ABI) the holding company of BACI, is included in the top-100 continent-wide, according to the rankings published by Jeune Afrique. ABI had moved up three places from a year earlier to 63rd in 2016. A further seven Ivorian banks were in the top-200, one less than in 2015: SGBCI (126th), BACI (131st), Ecobank-CI (134th), NSIA Banque (159th), SIB (160th), Bank of Africa - Côte d’Ivoire (BOA-CI, 183rd) and BICICI (185th).

Comings & Goings

The cast of players in the Ivorian banking sector has been relatively dynamic in recent years, with one new bank joining the market during each of the years 2014, 2015 and 2016, and two new players entering in 2017 alone.

Having arrived in the Senegalese market in 2015, Luxembourg-based BDK Financial Group took the next step towards installing itself throughout the UEMOA region with its launch of Banque d’Abidjan during the first half of 2017. This joint venture, with a 20% stake owned by La Poste de Côte d’Ivoire, will focus on the corporate and private banking segment, but will also be well positioned to provide retail banking services in the future since the postal branch network is to be put at the disposal of the bank.

In July 2017 Standard Bank began banking operations, trading as Stanbic, having been awarded a banking licence a year earlier and having established a representative office in Abidjan as far back as 2014. Stanbic will also pursue an initial focus on the corporate and institutional banking segment, particularly lending to businesses in the energy, petroleum, telecommunications, construction and consumer sectors.

Standard Bank is already present in some 20 countries in francophone and anglophone Africa, and operates a full-service universal bank in South Africa. As its investment in Côte d’Ivoire is greenfield in nature, it aims to roll out further services in the medium to long term, with brokerage operations foreseen in 2018 and retail banking from 2020 onwards.

STATE-OWNED BANKS: The only notable exit in recent years was Banque Pour le Financement de l’Agriculture (BFA), the majority state-owned bank that was liquidated by the government in late 2014 after a decade of operations. Originally launched in 2004 to support small and medium-sized enterprises in rural areas, BFA was making heavy losses, and its liquidation was billed as a first step in the restructuring of the state-owned banks.

By contrast, the state-owned Caisse Nationale des Caisses d’Epargne (CNCE) has been in provisional administration since mid-2015. As of January 2018 its ultimate fate remained unclear. The government has signalled that the bank will be restructured and recapitalised to the tune of CFA30bn (€45m) with a view to using its country-wide branch network to promote financial inclusion, while maintaining it as a state-owned entity. Despite boasting a large physical presence across the country, CNCE’s contribution remains minor when it comes to lending to support the economy. As of July 2017 it accounted for less than 1% of assets in the banking system. In its country report published in June 2017, the IMF highlighted the fact that fiscal transfers continue to cover the bank’s operating losses and sustain liquidity, with a CFA20bn (€30m) transfer in 2016. In line with the plan submitted to the Regional Banking Commission in mid-2016, the CNCE recapitalisation is expected to be completed by end-March 2018.

In addition to CNCE, the government has signalled that it will retain control of Banque Nationale d’ Investissement (BNI) as the “bank of the state”. Meanwhile, the IMF has noted the authorities’ intention to put BNI on a stronger financial footing by converting part of the non-transferable government debt on its balance sheet into marketable securities, thereby improving the bank’s liquidity position.

Privatisation Strategy

In line with the government’s Financial Sector Development Strategy, which includes restructuring public banks and strengthening transparency, there has been a gradual reshaping and privatising of the portfolio of state-owned banks over a number of years. In an effort to develop the capital markets and promote private sector development more broadly, it has largely pursued a privatisation strategy by selling stakes in its banks on the regional stock market, the Bourse Régionale des Valeurs Mobilières (BVRM).

SIB was privatised back in 2009, while the government has since wound down the 49% shareholding it had retained at the time. It was subject to an initial public offering (IPO) in late 2016. Most recently, the state sold its 10% stake in NSIA Banque as part of the lender’s July 2017 IPO on the BVRM, which saw CFA34.6bn (€51.9m) raised (see Capital Markets chapter). Of this, approximately 80% was new capital, with the remainder consisting of shares disposed of by the government. Two smaller state-owned lenders, Versus Bank and Banque de l’Habitat de Côte d’Ivoire are also being readied for privatisation, although it is as yet unclear whether these will be achieved by way of trade sales or via the stock market. As of July 2017, these two institutions each accounted for around 1% of total assets in the banking system.

Coming To Market

In addition to the listing of NSIA Banque, 2017 saw Ecobank-CI list on the BVRM, following in the footsteps of several other Ecobank subsidiaries across the region. The IPO, which ran from September 22 to October 11, 2017, raised CFA45bn (€68m), through the issuing of over 2.2m shares.

After rapid growth in recent years, Ecobank-CI’s balance sheet was becoming stretched, while there was a risk that the single obligor limit could become binding as it was gradually reduced (see analysis). By raising capital on the stock exchange, the bank aims not only to ease these immediate concerns, but also to bring in additional resources to finance its expansion plans for at least the next five years.

These two IPOs brought the number of banks operating in Côte d’Ivoire that are listed on the BVRM to seven. According to PME Magazine, in the first four months of 2017, the five previously listed banks increased their share prices by 8.2%. Among these, BCICI advanced 1.1% since end-2016, while its annual dividend was 4.3%. SGBCI, meanwhile, increased 8.9% during the same period, having posted similar gains over the course of 2016, while it distributed a dividend equating to a 3.7% return. SIB listed on the BVRM for the first time on October 27, 2016, and saw its share price rise by 70% by year-end before falling back 3.2% during the first four months of 2017 amid profit-taking. Its dividend amounted to CFA855 (€1.28), for a 3.6% annualised return. For its part, BOA-CI advanced 26.9% over the first four months of 2017, while its dividend represented a 3.5% annual return. Alios Finances, a leasing firm quoted under the name of SAFCA CI, saw its share price rise 15.1% in the first four months of 2017, despite tough conditions. “Our leasing segment experienced a 15% drop between 2016 and 2017, driven by factors such as the drop in cocoa prices, strains on certain companies’ treasuries, as well as increased competition in the segment as banks began providing leasing products,” Eric Leclere, CEO of Alios Fiances told OBG.

Consolidation Expected

There has been an influx of new banks over the past decade, but market players expect that this trend could be reversed in the coming years, particularly as more stringent regulatory and capital requirements come into force (see analysis).

“From a peak of 27-30 banks, we expect to see a gradual reduction to the 20-25 range,” Dominique Banny, director of client coverage for West Africa at Standard Bank, told OBG. “The migration to Basel III is going to put particular pressure on the small banks in terms of capital requirements, so becoming part of a bigger entity will become an important viability strategy.”

Marc Giugni, director of corporate services at Ecobank-CI, added that, “Consolidation is inevitable and imminent given the new regulation. In particular, it is quite likely we will see foreign or big local banks enter the market by buying smaller existing banks.”

Credit Growth

Having hit 29.6% annual growth in 2015, credit expansion slowed to a more sustainable 15.4% in 2016. The IMF estimated that credit growth expanded by 20% in the first half of 2017, exceeding earlier expectations, and would be 15-16% in 2018-19. While part of this deceleration can be accounted for by the modest slowdown expected in overall economic growth, the IMF projects monetary policy tightening by the Central Bank of West African States (La Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO) and reduced capital buffers arising from regulatory reforms to both play a large part.

“Our latest statistics show that the average cost of borrowing during the first half of 2017 experienced a decrease, in line with the sector’s dynamic and healthy level of competition amongst actors. We have not seen a significant drop in the level of growth, in volume nor in value of credit,” Ismael Fanny, deputy director-general of the Association of Banks and Financial Establishments in Côte d’Ivoire, told OBG. “Economic growth is still strong, and this seems to be supporting lending.”


In line with robust credit growth, total assets in the banking system increased by 19.6% to reach CFA6.9trn (€10.4bn) by December 2016, and remained steady at 7trn (€10.5bn) as of July 2017. According to the BCEAO, the ratio of loans to assets enjoyed a gentle progression from 53.7% in 2014 to reach 56.2% in 2016. Even as lending growth has seen the banks’ balance sheets swell, asset quality appears to have been maintained or even to have improved. Gross non-performing loans (NPLs) declined steadily from 12.3% in 2013 to reach 9.3% by June 2017. While this would still appear to be an elevated level of NPLs, the trajectory is one of very clear improvement as the legacy portfolios of under-performing loans dating from the pre-2011 period continue to fade in importance. Moreover, NPLs are well covered by provisions, with this ratio having improved from 68.6% in 2015 to 66% in June 2017.

One note of concern about asset quality arises from the increase in the concentration of loans to the top-five borrowers with respect to capital. Although the latest data from the BCEAO only dates from 2015, marked growth in this concentration level was in evidence, with it reaching 387.9 that year from 293.1 in 2014. Over-exposure to a small number of counterparties raises the prospect of elevated default risk in the event of an economic downturn.


Banking is traditionally a very profitable business in Côte d’Ivoire. While the last published industry-wide figures from the BCEAO date from 2013, they serve as a reference point. That year, return on equity (ROE) was 17.4% while return on assets (ROA) came in at 1.2%. Top-tier banks operating in the country have, however, been known to achieve ROEs double this level. The latest data published by the banks listed on the BVRM for the 2016 financial year are instructive. Profits at BICICI increased 19.3% to CFA7.5bn (€ 11.3m) during 2016 on the back of strong revenue growth, despite costs having increased by 8.8%. SGBCI saw its profits advance 31.1% to hit CFA35.4bn (€53.1m) for 2016 due largely to double-digit growth in income from both interest and commissions.

Profits at SIB were up 15% to reach CFA17bn (€26m) in 2016, while those at BOA-CA increased by 23.1% to CFA10.1bn (€15.2m). This level of profitability supported strong gains’ in these banks’ share prices and allowed for the distribution of dividends equating to returns ranging from 3.17% to 4.27%.

LIABILITIES: Lagging only slightly behind the increase in assets, the banking system’s total liabilities rose by a still impressive 18.43% during 2016 to reach CFA8.6trn (€12.9bn) by December 2016. Of this, 77.2% was accounted for by client deposits with the remaining 22.8% being raised through the inter-bank and money markets. By contrast, some 82.2% of banks’ financing had come from client deposits at end-2015. Although client deposits increased by 11.3% during 2016, this was about half the 22.4% advance seen in other liabilities. With rapid growth in lending outpacing the banks’ capital raising, it is perhaps unsurprising to see an increased tendency to seek funding through short-term money markets. Although this could further expose the banking system to refinancing risk, where rolling over debt becomes prohibitively costly or even impossible, market observers do not yet appear to be overly concerned by such developments.


With credit expanding at break-neck speed in recent years, it is hardly surprising that the capital-adequacy ratio (CAR) has fluctuated. Having increased from 9.2% in 2014 to 10.1% in 2015, the risk-weighted capital-to-assets ratio declined significantly to reach 8% by end-2016. However, 2017 saw the CAR rise to nearly 10% in June 2017. This is particularly impressive as new capital requirements being enforced from mid-2017 onwards and the phasing in of Basel II and III capital requirements in January 2017 were expected to lead banks to either raise further capital or restrict lending in the coming years. According to the IMF, most banks managed to meet the new minimum capital requirement of CFA10bn (€15m), but the IMF reported that four smaller banks – three of which are public lenders – will need stricter guidelines.

Increased Financing Costs

During 2017 the BCEAO took steps to limit repo and refinancing operations with the aim of encouraging banks to make more use of the inter-bank lending market, rather than relying on the central bank for their funding needs. These measures included the 100-basis-point increase in its marginal lending facility rate from 3.5% to 4.5% in January 2017 and the introduction of a ceiling on refinancing through this facility equal to two times a bank’s capital from June 2017. While the aim was to raise liquidity within the inter-bank market, an important side-effect has been an elevation of funding costs for the banks as they largely opted during the early part of the year to continue borrowing from the BCEAO at the revised rates rather than turning to the inter-bank market, where average rates are even higher. “We expect to see further increases in banks’ funding costs in the short to medium term,” Banny told OBG. “In addition to the BCEAO’s actions in early 2017, the widening fiscal deficit means the government will need to tap the bond market more than had previously been expected. However, since the supply of funds has not increased by a similar magnitude, this is likely to put pressure on sovereign rates, which would see a further increase in bank funding costs across the board.”

Financial Inclusion

The proportion of the population that is banked rose from 7.1% in 2007 to 16% in 2016, while the proportion of the population using financial services has more than trebled over the same period, from 13.6% to 48%, as a range of public and private initiatives bear fruit. The extension of the banks’ physical footprints across the country has played a major role in expanding the banked population, as has the rise of microfinance and mobile banking. One of the most important regulatory initiatives of recent years aimed at boosting financial inclusion was the obligation imposed on banks in October 2014 to offer 19 specific services to clients without charge. These included the opening of bank accounts, certain payments and bank transfers, the sending of bank statements, as well as payments and withdrawals using bank cards.

Digital Banking

In addition to traditional banks, mobile money services – where people can save, make payments and transfer money using their phone – continues to go from strength to strength, meaning that many more people have access to traditional banking services than have a traditional bank account (see analysis). This is a big part of the reason why half of the population are using financial services even though only one in seven has a bank account.

Physical Footprint

Following the return of political stability in 2011, the banks invested significantly in refurbishing and extending their networks of branches and bank machines. As a result, the collective footprint of banks has been extended massively in recent years. According to BCEAO data from mid-2017, Côte d’ Ivoire counted 667 bank branches, of which 375 were in Abidjan. By contrast, at the end of 2010 there were only 324 branches in operation across the country.

CNCE had the biggest footprint, with a total of 127 branches. Of these, 102 were in the provinces, nearly three times as many as the bank with the next-largest provincial footprint (BACI, with 35 provincial branches, followed closely by NSIA Banque with 33). NSIA Banque boasts the second-largest branch network, with 80 in total, followed by BACI (71), SGBCI (68), SIB (54) Ecobank-CI (54) and BICICI (45). All but CNCE have more branches in Abidjan than in the provinces. SIB and BOA-CI have been particularly active in increasing their branch footprint in the interior of the country.

The picture is different in terms of the distribution of bank machines, albeit Abidjan still dominates with 625 of the country’s 946 total. With 142, Ecobank-CI boasts the broadest network of bank machines, followed by SGBCI (117), NSIA Banque (114), CNCE (100), BNI (94), BACI (76), SIB (71) and BICICI (65). Of these, only CNCE has more bank machines outside Abidjan (78), with nearly twice the provincial network of next largest. Going forward, the major challenge facing the banks extending their physical footprint is the installation of electronic payment terminals in retail establishments. With continued evolution and use of technology, and the expected arrival of contactless payment, this is expected to become increasingly important.


According to the BCEAO, deposits in Ivorian microfinance institutions increased 28.4% during 2016 to reach approximately CFA200bn (€300m), the largest percentage gain of any UEMOA country that year. The rise in microfinance credits was even more impressive, expanding by 51.9% to reach just under CFA200bn (€300m) by year-end. “We are seeing more and more entrants to the microfinance market, which is underpinning rapid growth and boosting financial inclusion,” Yves Komaclo, Manager of Oikocredit, told OBG. “If even half the growth rates projected by microfinance players are achieved in the coming years, we will be well on course to increase the penetration rate from its current 16% to well above 20%.”

Microfinance is also providing a launch pad for Islamic banking, which is still relatively under-developed despite the large Muslim population. A national committee for Islamic finance was created in 2009, and recognised by the government in 2010. From this Raouda Finance, an Islamic microfinance organisation was created, offering savings and insurance products on a small scale. In 2017 another important development for the segment was the launch of microfinance lending through mobile banking by Celpaid, the first time such services have been made available in the country (see analysis).

Cooperative Banking

Côte d’Ivoire has a long a history of cooperative banking, with 123 cooperative entities, numbering 134 points of service in total, coming under the umbrella of the UNACOOPEC-CI federation by mid-2017. Currently going through a lengthy restructuring to strengthen and professionalise the cooperative banking sector, UNACOOPEC-CI is still dealing with the legacies of the pre-2011 period, due to which it racked up significant financial losses. According to the IMF, the federation’s recovery plan was still to be finalised as of January 2018, but would work to strengthen the network by resizing it around the viable banks; redefining the mission of the lead organisation; creating a financial institution with the lead organisation; and a recapitalisation plan over three years without external support.

Regulatory Reform

From July 2017 the BCEAO began enforcing a CFA10bn (€15m) minimum capital requirement for banks operating in the UEMOA region, while Basel II and III standards are to be phased in over a five-year period from January 2018.

“Requirements on transparency and data sharing in the Basel II and III guidelines will have a profound effect on our current means of doing business, requiring financial firms to not only increase capital buffers, but also invest in capacity building and IT infrastructure,” Olivier Dadjeu Kengne, CEO of Afril and First Bank Côte d’Ivoire, told OBG.

Together with the trend towards more rigorous enforcement of regulations, these developments are expected to have a profound impact on the domestic and regional banking sector both in the years ahead. In particular, banks will need to raise more capital, but they may also resort to credit rationing, which would see less credit available in the market, and at a higher cost.


Regulatory reforms and their more rigorous enforcement have started to change incentives and behaviour in the Ivorian banking system from the second half of 2017 onwards. Continued strong economic growth over the medium term, coupled with the large proportion of the population that remains unbanked, means there will be no shortage of business opportunities. However, the banks may not be in a position to seize them without significantly raising capital.

Reduced leverage should make for a more solid banking system, but will also take its toll on profitability. Increased regulation is expected to weigh heaviest on smaller banks, potentially encouraging mergers and acquisitions, notably by new foreign players. Should the economy underperform expectations, or experience a downturn, there are some signs that the banking sector has become more vulnerable after several years of strong credit growth. However, this should be mitigated by the regulatory reforms in place to solidify the banks.


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The Report: Côte d'Ivoire 2018

Banking chapter from The Report: Côte d'Ivoire 2018

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