What are Côte d'Ivoire's new prudential rules for banking?


Côte d’Ivoire’s banking sector has been a critical instrument for the country’s economic recovery. As several sectors returned to growth following the end of political and military unrest in 2011, Ivorian banks helped finance expansion in infrastructure, energy, industry, agriculture and services. As a result of this revival, the economy has posted successive years of expansion, with annual GDP growth averaging 8.5% between 2012 and 2018. The country’s robust economic performance has allowed total banking assets to maintain an upward growth trajectory. The bulk of sector activity and assets stems from the subsidiaries of international banks – primarily those based in France and Morocco – alongside a growing presence of regional banking players. As of the end of 2019 there were 29 banks operating in the 25m-person market, the majority of which remains unbanked. The large number of players has ensured a high degree of competition in the market. Banking expansion has been catalysed by the growing importance of Côte d’Ivoire – particularly the city of Abidjan – as a financial and economic centre in West Africa.

Despite the market’s potential, the challenge of navigating the local operating environment may deter some new banking entrants. A lack of adequate financial information regarding potential borrowers and economic agents also weighs on growth, and has often pushed lenders to focus credit allocation on a relatively small pool of private and state-backed enterprises. This has historically led to unhealthy levels of risk concentration in the banking sector. However, stronger regulatory safeguards are being implemented as the sector moves towards compliance with the Basel II and Basel III capital adequacy guidelines by 2023.

Sector Structure

Côte d’Ivoire accounts for the lion’s share of banking assets owned by the eight UEMOA members: ahead of Benin, Burkina Faso, Guinea-Bissau, Mali, Niger, Senegal and Togo. Ivorian banking assets account for approximately one-third of the total, according to end-2018 statistics included in a 2019 report from the union’s Banking Commission. Côte d’Ivoire’s eight-largest banks account for an estimated 80-90% of the market’s assets. These institutions – operating within an economy that is still overwhelmingly cash-based – rely on a large network of branches to service customers effectively and collect deposits.

Sector Players

The banking sector’s biggest player as of the end of 2018 was Société Générale de Banques en Côte d’Ivoire (SGBCI), a subsidiary of French banking heavyweight Société Générale. The institution’s assets totalled CFA1.91trn ($3.3bn) that year, according to data from the Banking Commission of UEMOA. This was followed by Togo-based Bank Atlantique Côte d’Ivoire, whose assets were valued at CFA1.49trn ($2.6bn). Another pan-African institution, Ecobank, was the third-largest operator in the country that year, controlling assets of CFA1.47trn ($2.5bn). Ivorian lender NSIA Banque was in fourth position, overseeing CFA1.09trn ($1.9bn), followed by Société Ivoirienne de Banque (SIB), a subsidiary of Morocco’s Attijariwafa Bank, with assets of CFA1.07trn ($1.8bn).

Banking Licences

Despite the large number of players, and a significant concentration of leverage among top-tier institutions, new players continue to enter the market. Mansa Bank, which focuses on corporate customers, received a licence in February 2019 and opened its Abidjan offices later that year, with a total of CFA12bn ($20.6m) in capital. French telecoms operator Orange was another 2019 entrant to the Ivorian banking segment, and plans to offer microfinance services. The institution was granted approval in July by the Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO) – which issues the zone’s common currency – to begin providing loans and collecting deposits within the UEMOA region.

State Participation

Much of the current structure of the sector arose from the state’s partial withdrawal, characterised by moves from the public sector to restructure or renounce its shareholding positions in several banking institutions over the past decade. For instance, after first privatising SIB in 2009 through the sale of 51% of its stake to Attijariwafa Bank, the state transferred an additional 19% to the majority shareholder five years later. Further shares were sold on the region’s stock exchange, the Bourse Régionale de Valeurs Mobilières (BRVM) in 2016 to reduce the government’s shareholding position to 5%. Another public offering the following year saw Ivorian authorities sell their 10% stake in NSIA Banque.

After signalling its intention to exit from Caisse Nationale des Caisses d’Epargne in 2018, in which the state had injected a combined CFA35bn ($60.2m) in capital the previous year, the government announced in late 2019 that the 100% state-owned lender’s name would be changed to Banque Populaire. This forms part of rebranding efforts to improve the institution’s reputation, following financial and governance problems that led the lender to be placed under administration in 2015. It is hoped this will attract renewed investment in its shareholding structure. As of late 2019 the bank had a network of 73 branches across the country and more than CFA40bn ($68.8m) in share capital. However, in November 2019 the State Employees’ General Retirement Fund purchased a 61.45% stake in the Togo-based Bank Oragroup from the US-headquartered private equity firm Emerging Capital Partners.


According to statistics from the Association of Banks and Financial Establishments in Côte d’Ivoire (Association Professionnelle des Banques et Etablissements Financiers de Côte d’Ivoire, APBEF-CI), the sector closed 2018 with total assets of CFA12.8trn ($22bn), a 15% increase on 2017 figures and roughly double the rate of expansion of national GDP. This was a slight improvement on the previous year’s performance, which saw total banking assets expand by 14.1% to reach CFA11.1trn ($19.1bn), according to the Banking Commission of UEMOA. Over the same period, bank deposits expanded to CFA8.4trn ($14.4bn), up 12% from CFA7.5trn ($12.9bn) in 2017, according to APBEF-CI data.

Meanwhile, total credit allocation increased by 18% over the same period to reach almost CFA7.1trn ($12.2bn). Sectors such as construction, infrastructure and energy have remained important activities for the banking sector. Additionally, mining – which is capital intensive but remains underexploited in Côte d’Ivoire relative to other countries in the region – is likely to offer strong growth opportunities. Asset quality has continued to improve, marked by a reduction in the rate of non-performing loans (NPLs), from 10.6% in 2014 to 9.3% by end-2018, according to IMF data. Many NPLs are reportedly linked to delayed payments in government contracts. As such, banks’ provisioning for NPLs has decreased from 73.6% in 2013 to 60% in 2017, though this rebounded somewhat to 64.5% in 2018, based on 2019 figures from the Banking Commission of UEMOA.

Market Risks

The country’s membership in the UEMOA’s common monetary union has allowed Ivorian banks to limit their interest rate and currency risk; the majority of the remaining risk for the market is linked to the specifics of lending activity. A key event that impacted the sector was the July 2018 liquidation of one of the country’s largest cocoa exporter, SAF-Cacao, after it defaulted on contracts involving thousands of tonnes of cocoa from the 2016/17 season. The firm had borrowed from several lenders – including Ecobank, SIB, NSIA Banque, BICICI and SGBCI – and accrued an estimated CFA150bn ($257.9m) in debt.

Additional risks that are likely to factor into the sector’s performance in the near term include the 2020 elections, alongside the risk transmitted by small and medium-sized enterprises (SMEs) – particularly those that depend on government contracts and may face payment delays. The international operating environment will also be strained by the ongoing Covid-19 pandemic, which is likely to lead to a global slowdown of both the industry and the wider economy.

Nevertheless, in April 2020 four regional banks – SGBCI, Coris Bank International, National Investment Bank and Banque Sahélo-Saharienne pour l’ Investissement et le Commerce – donated a total of CFA200m ($343,800) to a fund dedicated to helping the government offset the impact of the virus. Banks operating in the Ivorian market would do well to diversify their loan portfolio in order to reduce the incumbent risks of lending credit: the IMF found, when examining the specifics of risk distribution in Côte d’Ivoire’s banking sector in 2018, that the credit loaned to the top-five borrowers across all Ivorian banks accounted for 98.9% of the total capital of the banking system.


Strengthening internal procedures and ratios has helped to mitigate the risk to Ivorian lenders. In recent years Côte d’Ivoire’s banks have increased their capital as the region moves towards the implementation of Basel II and Basel III liquidity requirements. The process, which will impose stricter credit concentration rules, began in 2018 and is expected to be completed in 2023. Previous rules allowed banking institutions to loan as much as 75% of their capital to one borrower. This was reduced to a 65% limit for a single entity in 2018 and will be tightened to 25% by 2022. Implementation of the new capital adequacy rules will help to solidify the banking system, though in the short term it may hinder the capacity of smaller banks to allocate credit. “Banks were preparing for the entrance of the new regulations, but it is important to factor in – as part of this preparation – the costs induced by the implementation of these rules, since they require changes in the organisational framework, information system and governance of banks,” Ismael Fanny, deputy executive director at APBEF-CI, told OBG.

While the move will reduce the vulnerability of individual institutions to over-investment in one entity, there is no mechanism to prevent such a concentration of credit by the overall sector. “The existing regulation stipulates that a bank should not have more than 25% of its credit in a single entity. But there is no similar restriction to alert if the sector is too exposed to a single company or lender. This was the case with SAF-Cacao, which had multiple credits across several banks,” Fanny told OBG. Regionally, the current implementation of international requirements could also promote a higher level of regional participation of lenders across UEMOA member countries, in an attempt to spread the higher capital requirements across a broader market base.

SME Lending

Reducing the concentration of risk will require time and a deeper pool of potential new customers. Collecting data on the current level of lending to the large number of SMEs is difficult, primarily because different banking institutions use different parameters. Wider lending to these businesses is one method of spreading risk. However, while government policy has increasingly focused on extending credit facilities to local SMEs, a lack of information in some cases makes it challenging for lenders to accurately judge the level of risk related to companies.

Despite the challenges, lenders seem keen to increase their engagement with SMEs. Many banks now have specialised departments to service SMEs with new instruments. In mid-2019 SGBCI allocated a CFA350bn ($601.7m) credit line to the Ministry of Commerce and Industry for the financing of SMEs, as part of the lender’s broader strategy to loan Ivorian SMEs up to CFA450bn ($773.6m) over the 2019-23 period.

In February 2020 the International Finance Corporation agreed to invest CFA17.5bn ($30.1m) in a debt securitisation by NSIA Banque, which will finance loans to SMEs. This marks the first case of a loan security issued by a commercial bank within UEMOA, and is also the first among the member countries to have been issued with a five-year maturity. Boosting SME lending will also require efforts to improve SMEs’ internal and external operating environments, including a reduction in red tape and more robust economic performance.

“The economy revolves around the successful development and promotion of SMEs,” Mamadou Sanon, general manager at Coris Bank International, told OBG. “However, when it comes to financing SMEs, one of the main challenges faced by banks is the lack of reliable financial statements, in addition to the dearth of statistics and in-depth studies to better address the needs of SMEs.” Increasing the level of lending to SMEs is part of a broader government effort to expand financial inclusion, much of which is featured in the National Financial Inclusion Strategy 2019-24 (see analysis).

According to figures from APBEF-CI, the overall penetration of financial services in Côte d’Ivoire reached around 40% in 2018. Notably, this figure includes mobile money services, which have been growing exponentially in the country over recent years. Only around one-fifth of Ivorians have a traditional bank account. “There is an increasing presence of digital finance in Côte d’Ivoire and the rest of the countries in the region,” Ruben Dieudonné, CEO of financial group Baobab Côte d’Ivoire, told OBG. “It provides a win-win situation, as customers can access financial services provided they have a mobile phone and banks do not have to open a branch in remote areas.” Through the implementation of the National Financial Inclusion Strategy, the government aims to increase the financial inclusion ratio to 60% by the conclusion of the roadmap.

Infrastructure Expansion

Bringing more people into the financial sector will rely on the availability of banking infrastructure to enable consumer access. At the end of 2018 Côte d’Ivoire punched considerably above its weight with regard to mobile money transfers across UEMOA member states: the country was home to three of the region’s eight licensed electronic money institutions, which processed 41.2% of the value of the region’s mobile money transfers and 27.8% of its total number of transactions, according to the 2019 report from the Banking Commission of UEMOA.

Even as digital banking services have grown significantly in Côte d’Ivoire, the country maintains a strong foothold in the brick-and-mortar segment: the sector closed 2018 with a nationwide network of 694 banking branches and over 700 ATM points, figures which constitute around one-fifth and one-quarter, respectively, of the region’s total. Although the majority of these branches are concentrated in Abidjan, which houses one-third of the country’s banking branches, the port city of San Pedro – a primary point of transit for Ivorian cocoa exports – is another key banking centre. This is primarily due to the cash-driven nature of cocoa activity, which necessitates that agricultural cooperatives cash in payment cheques at bank branches. Banks with an extended network of branches maintain an advantage in terms of attracting deposits and generating business, underlining the role that a physical presence continues to play within the market.

Market Weight

The economic importance of Côte d’Ivoire’s banking sector extends beyond the growth of the domestic economy: the BRVM is based in Abidjan, and banking activity plays a key role on the bourse (see Capital Markets chapter). At the end of 2019 the financial sector accounted for 42.2% of the CFA4.7trn ($8.1bn) in capitalisation on the exchange. Of the 46 listed companies, 35 have operations in Côte d’Ivoire and, of these, six banks have a heavy participation in trading volumes and capitalisation. “Banks are really the only sector of the Ivorian economy that is adequately represented on the stock exchange,” Soualio Fadiga, executive director at the Professional Association of Management and Intermediation Companies, told OBG.

Banks comprised many of the new listings on the bourse in recent years. The Senegal subsidiary of Bank of Africa (BOA) listed on the BRVM in December 2014 to join its counterparts in Benin, Burkina Faso, Côte d’Ivoire and Niger. SIB and Burkina-based Coris Bank International listed in 2016. NSIA Banque joined the exchange in mid-2017, followed by the Ivorian subsidiary of Ecobank at the end of that year. Another financial institution with a foothold in the continent, Bank Oragroup, became the 46th company to list on the regional exchange when it joined in April 2019. At the end of that year the six BRVM-listed banks with operations in Côte d’Ivoire – namely, BICICI, BOA-Côte d’Ivoire, Ecobank, NSIA Banque, SGBCI and SIB – were among the most actively traded on the BRVM.

Regional Context

This presence reflects the banking sector’s weight in Côte d’Ivoire, but also its growing foothold in the region more broadly. By April 2020 there were a total of 130 banks and an additional 20 financial establishments across the eight UEMOA countries. Côte d’Ivoire remained the country with the highest number of these banks, at 29. This was followed by Senegal’s 25 banking institutions, and Benin and Burkina Faso, which had 15 banks each. The total combined banking assets of union countries expanded by approximately 6.8%, from CFA35.4trn ($60.9bn) in 2017 to CFA37.8trn ($65.0bn) the following year, according to BCEAO data. Six banks – namely, Atlantic Business International, Attijariwafa Bank, BOA, Ecobank, NSIA Banque and SGBCI – had a combined regional market share of 49.7%, according to the 2019 report from the Banking Commission of UEMOA. There were approximately 12.1m bank accounts across the region, up from 10.3m in 2016. Credit allocation also saw a steep rise, with total credit expanding from CFA16.9trn ($29.1bn) to CFA20.9trn ($35.9bn) between 2016 and 2018 – representing an increase of 23.9% over the two years. During the same period, regional deposits expanded by one-fifth, from CFA20.8trn ($35.8bn) to CFA25.1trn ($43.1bn). Mobile money providers in the region saw CFA20.5trn ($35.2bn) in transactions in 2018, an increase of 30.4% relative to the previous year. Total mobile banking accounts in the region expanded from 31.8m to 37m over the same period, according to the Banking Commission of UEMOA’s report. At the end of March 2020 the BCEAO announced a set of monetary and economic directives to help UEMOA member states deal with the impact of the Covid-19 pandemic, in addition to new measures to promote electronic transactions.

Islamic Finance

Besides mobile money, an additional mechanism that may further drive financial inclusion is Islamic finance. Despite the substantial size of Côte d’Ivoire’s Muslim population, Islamic finance products have registered slow growth relative to other countries in the region. Afriland FirstBank Côte d’Ivoire became the first Ivorian bank to offer Islamic products when it launched an Islamic window in 2016.

In order to boost financial inclusion across the country, regional authorities published a decree in mid-2018 that allowed microfinance institutions to offer Islamic finance products. This was followed by the 2019 launch of a mutual fund by Islamic microfinance provider Raouda Finance to allow subscribers to invest in different assets through a sharia-compliant structure – one of the earliest examples of such a fund in the region. Islamic bonds have also become increasingly useful to raise funds at the government level. In late 2015 Côte d’Ivoire issued its first sukuk (Islamic bond), worth CFA150bn ($257.9m) and with a maturity of five years. This was listed on the BRVM the following year, alongside another sukuk, also valued at CFA150bn ($257.9m) but with a seven-year maturity.


Challenges for the growth of the Ivorian banking sector in the short term notably include the 2020 presidential election, scheduled for the end of the year, which may lead investors to adopt a wait-andsee approach. On a global level, it remains to be seen how far – and for how long – banking operations and economic activity more broadly will be disrupted by the Covid-19 pandemic. In the meantime, the ongoing integration of more stringent liquidity and lending ratios is helping to solidify the Ivorian banking sector.

The banking sector has been central to the country’s ongoing economic recovery, providing a strong growth platform for lenders operating in Côte d’Ivoire. The sector remains extremely competitive, due in part to the large number of lenders. However, as liquidity demands become stricter, new opportunities for mergers and acquisitions may well arise – especially as some smaller competitors face difficulties raising new capital and expanding their customer base. While brick-and-mortar institutions remain a crucial contact point for the sector, the country’s banks are increasingly integrating digital and mobile money services into their distribution networks, which is supporting financial inclusion.

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The Report: Cote d'Ivoire 2020

Banking chapter from The Report: Cote d'Ivoire 2020

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