More than 80% of Absa Group’s profit came from just three African markets in the six months to June, exposing a geographical concentration that South Africa’s third-largest bank is now seeking to address through a broader continental strategy.

South Africa, Kenya and Ghana remain central to the lender’s earnings, but its next growth phase involves developing additional sources of revenue in markets where it sees opportunities to expand corporate banking, investment services and financial operations.

The strategy involves a combination of new market entry, acquisitions, regulatory approvals and changes to existing subsidiaries. Absa expects to complete the reorganisation of its businesses outside South Africa within two years, positioning the group to compete more broadly across Africa.

Nigeria could open a new corporate banking business

Nigeria represents one of the most significant opportunities in this strategy. Absa is seeking to convert its representative office in the country into a merchant bank, a move that would give it access to a wider range of corporate banking activities.

Unlike a representative office, the proposed merchant banking operation would be able to accept corporate deposits, provide loans and offer investment banking and project financing services. The bank is already applying for the necessary licences and hopes to have the operation running within 12 to 18 months, according to Charles Russon, its group executive for Africa Regions.

Nigeria’s economic reforms under President Bola Tinubu have improved its investment appeal, potentially creating opportunities for international financial institutions seeking exposure to corporate financing and investment activity. An expanded Nigerian operation would also bring Absa into closer competition with domestic lenders such as Zenith Bank, Access Holdings and First Bank of Nigeria, alongside South African competitors Standard Bank and FirstRand.

Existing investments offer another route to growth

Absa’s expansion strategy is not limited to entering new countries. The lender is also seeking to improve the financial contribution of businesses where it already has an established presence. Kenya illustrates this approach. The bank wants to increase its ownership of its local subsidiary from 72% to 85% by 2028, allowing it to retain a larger share of the business’s earnings.

Its June tender offer sought to acquire an additional 16.5% stake for $238.7 million, but the transaction increased its holding by only 3.5 percentage points. Russon said Absa remained committed to raising its ownership, arguing that a larger stake would improve the relationship between the capital allocated to the subsidiary and the profits attributable to the group.

In Uganda, the bank has completed the integration of Standard Chartered’s wealth and retail-banking business, which it acquired in 2025. Tanzania presents a different opportunity. Absa is considering consolidating its two banking operations in the country to create greater scale and take advantage of infrastructure investments.

Russon identified Tanzania as an important growth market within East Africa, a region the bank considers strategically significant.

Angola adds a new market to the strategy

Absa is also preparing to establish a representative office in Angola, extending its reach into another oil-producing economy. Economic reforms under President João Lourenço are aimed at modernising the country and attracting private investment.

Higher oil prices, driven by conflict in the Middle East, have also strengthened export revenues and eased pressure on public finances.

Russon believes the country is becoming more transparent and attractive to investors, creating conditions for increased business activity. The expansion comes as Absa moves beyond a period of substantial internal restructuring under Chief Executive Officer Kenny Fihla.

The bank’s challenge now is to turn those organisational changes into sustainable growth, reducing its dependence on a small group of established markets while building businesses capable of contributing more meaningfully to group earnings.