Record profit signals resilience
The 2024 annual report released by the Central African Banking Commission, COBAC, shows commercial banks active in the CEMAC bloc booked a combined net profit of 449.8 billion CFA francs, equivalent to roughly 805 million US dollars at the prevailing BEAC reference rate (COBAC 2024 Annual Report).
The figure is 12 percent higher than 2023, extending a five-year streak of upward profitability across Cameroon, Central African Republic, Congo-Brazzaville, Gabon, Equatorial Guinea and Chad, even as global monetary tightening and softer commodity prices challenged liquidity.
Macroeconomic tailwinds in Central Africa
Growth across the six-member customs union averaged 3.4 percent in 2023 and is projected by BEAC to reach 4 percent this year, supported by modest rebounds in oil output, public investment in roads and ports, and gradual easing of pandemic-era restrictions (BEAC Monetary Policy Report).
Faster activity widened the deposit base, which climbed to 16.2 trillion CFA francs in December, giving banks cheaper funding to deploy into sovereign bills, corporate facilities and retail credit, while net interest margins remained resilient at 5.2 percent on average across the union.
Where the profit came from
Interest income still accounted for 71 percent of gross operating revenue, yet fee and commission lines rose 9 percent, reflecting expansion of mobile money, cash-management products and trade finance pipelines linked to intra-regional corridors such as Douala-Ndjamena and Pointe-Noire-Brazzaville.
Treasury portfolios also delivered windfalls as yields on six-month BEAC bills averaged 4.9 percent, while non-performing loan provisioning costs fell after the hydrocarbons and timber exporters that restructured debts in 2020 returned to cash-flow positives thanks to disciplined spending and firmer regional demand.
Stronger prudential buffers
COBAC confirmed that average solvency rose to 15.3 percent, comfortably above the 10 percent regulatory floor introduced by Basel II guidelines adopted in 2019, while the liquidity coverage ratio improved to 141 percent, giving lenders headroom to absorb exogenous shocks without curbing credit.
Non-performing loans, however, remain elevated at 12.1 percent of gross advances, more than double the sub-Saharan median, prompting COBAC to reiterate its directive on enhanced collateral valuation and real-time credit bureaus to curb serial defaulters.
Digital transformation and SME financing
Banks accelerated partnerships with fintechs licensed under the new CEMAC payment services directive, rolling out instant transfer rails and QR code acceptance that drove a 28 percent surge in transaction volumes and widened fee income without significant balance-sheet risk.
Small and medium-sized enterprises, long underserved, benefited from targeted guarantee schemes backed by the Development Bank of Central African States, BDEAC, which unlocked 180 billion CFA francs in fresh credit lines across agro-processing, logistics and digital startups over the period, according to BDEAC’s mid-year review.
Mobile penetration across CEMAC now exceeds 88 percent, and banks are leveraging USSD channels to reach rural customers; Ecobank’s Xpress account alone added 700,000 Congolese users in twelve months, according to company filings.
Analysts expect GIMACPay’s mid-2025 interoperability of mobile wallets and bank accounts to easily push region-wide cashless transaction value beyond 10 trillion CFA francs each year.
Cross-border integration gains pace
Regional groups such as BGFI, Ecobank and Afriland now command over 60 percent of total assets, easing fragmentation and facilitating standardized risk-management, while the recent launch of the single treasury bond market in Yaoundé offers deeper liquidity pools for asset-liability matching.
Cross-listing of financial instruments is expected to accelerate after regulators agreed on mutual recognition rules between the Douala Stock Exchange and the BVMAC in Libreville, a decision that rating agencies say could lower the cost of equity for well-governed banks.
Risks on the horizon
BEAC forecasts regional inflation will ease from 5.9 percent to 3.8 percent in 2025 as food supply chains normalize, enabling gradual policy-rate cuts that could sustain credit growth; yet external risks tied to US dollar strength and Euro-zone slowdown persist.
A sharper decline in crude prices would pressure fiscal buffers of oil-reliant members and raise sovereign risk weightings, although Congo-Brazzaville’s ongoing debt-reprofiling dialogue with multilaterals is cited by Standard & Poor’s as a positive signal for repayment capacity.
Cyber-security also ranks high on board agendas after two mid-tier banks in Cameroon experienced distributed denial-of-service incidents in March, prompting COBAC to mandate regional penetration tests and to fast-track the adoption of ISO 27001 frameworks across all institutions by next December.
Strategic takeaway for investors
Despite those headwinds, most analysts, including Moody’s, expect the sector’s return on equity to stay near 14 percent, underpinned by digital scalability and prudent cost control, while planned state divestments in two Gabonese banks could unlock fresh capital market activity.
Speaking in Brazzaville, Finance Minister Rigobert Roger Andely affirmed that “a sound regional banking system is central to Congo’s diversification strategy”, pointing to planned treasury-bond auctions that will rely on the deepening balance sheets of CEMAC lenders.
The 2024 earnings season therefore consolidates the narrative of a gradually integrating financial space in Central Africa, one that holds promise for investors seeking yield and developmental impact alike, provided vigilance over governance, cyber risk and commodity cycles is sustained.
