Standard Bank Group is considering a greenfield entry into Ethiopia as it evaluates expansion opportunities in Africa’s second-most populous country, despite regulatory constraints on foreign ownership in the banking sector, a senior executive has said.
Joshua Oigara, regional chief executive of Stanbic Bank, the group’s East African subsidiary, said Ethiopia remains a strategically attractive market even with a 49 percent cap on foreign ownership in financial institutions.
He said the lender typically prefers majority or full ownership structures when entering new markets, making minority stakes less appealing under current regulations.
“Stanbic Bank has been a partner in South Sudan since 2012, but we have also been open in saying that as the country seeks to raise minimum capital requirements, the business environment has not kept pace,” Oigara said.
Ethiopia’s banking sector regulations allow foreign financial institutions to establish greenfield operations, a route Stanbic is now actively considering as it assesses long-term prospects in the market.
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Oigara pointed to recent foreign investment in Ethiopia’s telecommunications sector as an example of gradual market opening, noting that early-stage losses in such markets are often followed by long-term gains.
“One of our biggest clients is the telecommunications business that entered Ethiopia a few years ago. It was a difficult environment. Does it tick all the right boxes now? Maybe not yet. Are we seeing progress? Yes,” he said.
He added that investors often underestimate long-term opportunities by focusing on short-term challenges, arguing that strategic investments in frontier markets tend to yield stronger returns over a 10-year horizon.
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“Sometimes we take a short-term view and look at things through a one-, two- or three-year lens. Yet when you look at opportunities over 10 years, you are likely to wish you had invested even more,” he said.
The comments come as Ethiopia continues to pursue economic liberalisation measures, including reforms aimed at opening key sectors such as telecommunications, banking and logistics to foreign participation.
However, investors remain cautious due to regulatory uncertainty, foreign exchange constraints and macroeconomic pressures in the country.
Oigara also addressed recent debates around higher minimum capital requirements in some African markets, arguing that such measures must be aligned with underlying economic fundamentals.
He said imposing additional capital obligations in environments where economic conditions remain weak could strain financial institutions without necessarily strengthening system stability.
“Our position is that at this moment, we do not see any justification for additional capital in the South Sudan market,” he said, citing challenges such as inflation and foreign currency shortages.
Despite regional headwinds, Stanbic Bank said it continues to see strong opportunities in sectors such as energy, infrastructure, oil and gas, and trade finance across East Africa.
Oigara noted that the bank’s deal pipeline remains robust, supported by its structuring expertise and corporate and investment banking capabilities.
He cited recent transactions including Kenya’s US$1.5 billion sovereign debt refinancing and a US$155 million corporate bond issuance as examples of growing demand for complex financial solutions.
The lender is also involved in the securitisation of Kenya’s Roads Maintenance Levy and is financing Uganda’s crude oil pipeline project, underscoring its participation in large-scale regional infrastructure deals.
Oigara said private sector credit growth in Kenya has recovered from negative territory in 2024 to around 8 percent in early 2026, adding that further expansion remains possible as asset quality improves.
He said declining loan loss ratios were creating room for balance sheet growth, with the bank potentially doubling its size within the next three to four years.
Stanbic Bank’s strategy reflects a broader push by African lenders to expand regionally and capture opportunities in fast-growing but often underbanked markets, despite regulatory and macroeconomic challenges.
