Africa’s largest lender by asset base, Standard Bank, is cautious about venturing into Ethiopia and has urged more reforms in liberalising the country’s banking landscape if it is to consider market entry.

 

Standard Bank, which is the parent company of Stanbic Bank in the East African region, says that whereas Ethiopia has taken laudable steps in opening up the banking sector to foreign participation, it needs further regulatory safeguards to ensure an even playing field for both foreign and local players, including a rethink of the 40 percent cap on foreign nationals’ ownership.“It is a market in which we would like to have full banking operations at some point but there are still some things that we are engaging with the regulator and we would like to see in the regulation to give us the confidence to invest,” Standard Bank’s Chief Executive for Corporate and Investment Banking, Luvuyo Masinda, said on the sidelines of the Africa Markets Conference in Cape Town, South Africa. “We are watching very closely what’s happening to the telecommunication sector, which was opened up three years ago, and it has been an uneven experience. So, it will be purely dependent on the regulation.”In March 2025, the National Bank of Ethiopia issued Business Proclamation No1360/2025, ushering in liberalisation of the country’s banking sector by allowing foreign investment in the country’s banks.

The new law, however, caps foreign institutional ownership of a banking entity at 40 percent and foreign nationals’ ownership at 49 percent, a provision that many would-be entrants have deemed unfavourable.

Standard Bank has joined Absa Bank in expressing misgivings around market entry in Ethiopia, citing the need for further reform.

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