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Mr. Mauro Mecagni, Daniela Marchettini, and Mr. Rodolfo Maino

Beck and Cull (2013) , banking in SSA has undergone dramatic changes over the past 20 years. Financial liberalization and related reforms, upgrades in institutional and regulatory capacity, and more recently the expansion of cross-border banking activities with the rapid development of pan-African banking group networks have significantly changed the African banking and financial landscape. Once dominated by state-owned institutions and distorted in their operations by restrictive regulations, banking systems in SSA are now deeper and more stable, and the incidence

Mr. Mauro Mecagni, Daniela Marchettini, and Mr. Rodolfo Maino
Banking in SSA has undergone very significant changes over the last two decades. Financial liberalization and related reforms, upgrades in institutional and more recently the expansion of cross-border banking activities and the rapid development of Pan-African banking groups are signaling greater financial integration and significant changes in the African banking and financial landscape. Nonetheless, excess liquidity in many countries reflects limited lending opportunities and, despite improvements, asset quality and provisioning remain comparatively low. Dollarization has also been a persistent characteristic in several natural resource-dependent economies. This paper discusses key stylized facts and trends of banking development in SSA, looking at a variety of dimensions such as size, depth, soundness, and efficiency. It also assess the rapid expansion of pan-African banking groups, which have overtaken the role of the European and U.S. banks that had traditionally dominated banking activities in SSA, creating significant cross-border networks and becoming the largest participants in new syndicates and large bilateral loans to finance infrastructure development.
Mr. Charles Enoch, Mr. Paul Henri Mathieu, and Mr. Mauro Mecagni

supervisors monitor the business plans and governance of the PABs; (2) the coverage of consolidated supervision and the extent of cross-border collaboration; and (3) the level of crisis preparedness (modalities of liquidity backstopping and bank resolution) among supervisors. The missions also met with each of the main cross-border banking groups to discuss their business plans and their risk mitigation strategies. Pan-African banking groups have expanded rapidly across sub-Saharan Africa (SSA) ( Figure 1 ). 1 Seven banking groups dominate in terms of their geographic

Mr. Charles Enoch, Mr. Paul Henri Mathieu, Mr. Mauro Mecagni, and Mr. Jorge I Canales Kriljenko
Pan-African banks are expanding rapidly across the continent, creating cross-border networks, and having a systemic presence in the banking sectors of many Sub-Saharan African countries. These banking groups are fostering financial development and economic integration, stimulating competition and efficiency, introducing product innovation and modern management and information systems, and bringing higher skills and expertise to host countries. At the same time, the rise of pan-African banks presents new challenges for regulators and supervisors. As networks expand, new channels for transmission of macro-financial risks and spillovers across home and host countries may emerge. To ensure that the gains from cross border banking are sustained and avoid raising financial stability risks, enhanced cross-border cooperation on regulatory and supervisory oversight is needed, in particular to support effective supervision on a consolidated basis. This paper takes stock of the development of pan-African banking groups; identifies regulatory, supervisory and resolution gaps; and suggests how the IMF can help the authorities address the related challenges.
Mr. Paul Henri Mathieu, Mr. Marco Pani, Shiyuan Chen, and Mr. Rodolfo Maino
Using data collected from pan-African banks’ (PABs), balance sheets and other sources (Orbis, Fitch), this study identifies some key patterns of cross-border investment in bank subsidiaries by key banking groups in sub-Saharan Africa (SSA) and discusses some of the determinants of this investment. Using a gravity model relating the annual value of a banking group’s investment in the net equity of its subsidiaries to a set of explanatory variables, the analysis finds that cross-border banking is in part driven by a search for yield, diversification, and expansion for strategic reasons.
International Monetary Fund
There has been a rapid expansion of pan-African banks (PABs) in recent years, with seven major PABs having a presence in at least ten African countries: three of these are headquartered in Morocco, two in Togo, and one each in Nigeria and South Africa. Additional banks, primarily from Kenya, Nigeria, and South Africa, have a regional presence with operations in at least five countries. PABs have a systemic presence in around 36 countries. Overall, the PABs are now much more important in Africa than the long-established European and American banks.
Mr. Montfort Mlachila and Mr. Masafumi Yabara

Services Figure 9. Commercial Bank Indicators Figure 10. Sub-Saharan Africa: Systemic Banking Crises, 1980–2010 Figure 11. Sub-Saharan Africa: Banking System Funding, June 2011 Figure 12. Sub-Saharan Africa: Financial Stability Indicators Figure 13. Sub-Saharan Africa: Selected Pan-African Banking Groups, June 2011 Tables Table 1. Sub-Saharan Africa: Macroeconomic Indicators

Mr. Montfort Mlachila, Seok Gil Park, and Mr. Masafumi Yabara

other developing regions, but gradual financial deepening is under way in most countries. Impediments to development include the small size of national markets, low income levels, and weak creditor rights and judicial enforcement mechanisms. Recent developments, such as the expansion of mobile phone–based banking and the spread of pan-African banking groups, have the potential to significantly change the landscape for banking in much of SSA, but they also introduce new challenges for financial regulators. Introduction Many countries in sub-Saharan Africa