Keywords: Africa, transnational banks, finance, economic crisis

The share of foreign banks in the financial sector in Africa is extremely high. The IMF estimates that 45% of all commercial banks in Africa are owned by foreign capital. In other developing regions, this figure is 30%¹. However, this was not always the case. Over the past half-century, the role of foreign banks in the development of the continent's countries, as well as the attitude of national governments towards them, has repeatedly changed. In the first post-colonial years, European banks dominated almost all of the newly liberated countries. First of all, this applies to the British "Barclays" and "Standard Chartered" and French - "Societe Generale" and "Credit Lyon".

A BIT OF HISTORY

In the 1960s and 1970s, a wave of mass nationalization of foreign property in various sectors of the economy, including financial ones, took place in many countries of the continent. The reasons were different: in some cases, it was following the statist concept of development (in the so - called "socialist orientation" countries-Egypt, Guinea, Mozambique, Tanzania, etc.); in others, it was pursuing a policy of Africanization of foreign ownership (in most countries of the CFA franc zone*, as well as in Kenya and Nigeria); in others, it was implementing a policy of Africanization of foreign ownership (in most countries of the CFA franc zone*,Third , the governments ' own initiative (Ghana, Lesotho and Uganda); fourth, the bankruptcy of some foreign banks (for example, the International Bank of Credit and Commerce (BCCI) and Meridian Biao).

Later, disillusionment with the performance of state-owned banks (low efficiency, imperfect management structure, etc.) in the context of the deep economic downturn of the 1980s prompted many African governments (not without the efforts of Western donors) to embark on their privatization, opening the way for new players. As practice has shown, in the absence of the necessary internal resources and trained national personnel, these players in most cases turned out to be banks of former metropolises, which in terms of the scale and nature of their operations turned into multinational banks (TNBS).

Since the early 1990s, Africa has increasingly seen a significant shift in the ownership structure of the credit and banking sector in favor of the foreign segment. This process was initiated by massive bankruptcies of local banks, including state-owned ones, in a number of African countries. Following the insistent recommendations of international financial organizations - the International Monetary Fund (IMF) and the World Bank (WB), many countries of the continent have begun to gradually implement structural reforms in the credit and banking sector, aimed at liberalizing it-

* The CFA franc (commonly known as the African franc) is the currency of 14 African countries that are part of the French franc currency area. When it was introduced in the 1960s, the abbreviation was formed from the initial letters of French words meaning French African Colonies. Countries of the zone: Benin, Burkina Faso, Cote d'Ivoire, Central African Republic, Chad, Gabon, Central African Republic, Guinea-Bissau, Mali, Niger, Senegal, Togo and since 1984 Equatorial Guinea.

localization. First of all, they concerned the removal of existing restrictions on foreign participation in the share capital of local commercial banks, as well as development banks, and the elimination of other obstacles to the activity of foreign banking capital.

Former colonial banks did not hesitate to take advantage of the new environment and actively began to return to local financial markets. For example, in the CFA franc zone, Societe Generale, Credit Agricole and BNP-Paribas were again the main foreign participants in the banking sector (the latter two are the successors of Credit Lyon and the BSI consortium). In former English - speaking countries, these are Barclays and Standard Chartered. Portuguese banks have returned to their former colonies of Angola and Mozambique.²

So, as a result of the wave of privatization and restructuring of banks, including state-owned ones, the scale of foreign participation in the credit and banking sector of African countries has increased markedly over the past two decades. While in the mid-1990s less than one quarter of banking assets in Africa were owned by foreign banks, and many countries still had State-owned banking systems, by 2005 more than half of the countries in the region had a banking sector with either a dominant or significant share of foreign assets.³

Although similar trends are being observed in other regions of the world, this process is particularly intense in Africa. The World Bank estimates that in 21 African countries, more than 60% of all banking assets are held by foreign banks (while in Botswana - 100%, Mozambique - 99%, Zambia - 76%, Tanzania - 70%), in nine more - in mixed (foreign-state) and only in three countries in the region (Ethiopia, Eritrea and Togo) banks remain predominantly state-owned ⁴.

Not the least role in such an active penetration of foreign banks into Africa, including former colonial ones, is played by their high profitability, which is several times higher than similar indicators in other developing regions. Foreign banks in Africa are also more profitable than local ones. According to the IMF experts, there is no such gap in the profitability of banks with different forms of ownership anywhere in the world.

According to the available data, 215 main branches of TNBS operate steadily in Africa, of which only 35 institutions are controlled by US banks, and 180 are fully owned or controlled by leading TNBS in a number of Western European countries. We are talking primarily about TNBS in France and Great Britain, which have an extensive network of branches. At the same time, up to 80% of the subsidiaries of TNB Great Britain are located in former English colonies, and almost 70% of similar structures of TNB France are concentrated in French - speaking African countries-members of the CFA franc zone. TNBS of these two countries account for at least 85% of foreign banking institutions in Africa, and they own about 80% of their combined share capital and assets.⁵

WESTERN MULTINATIONAL BANKS

Of the French banks, Societe Generale (CS), Credit Agricole (which absorbed Credit Lyonnais in 2003) and BNP-Paribas are the most active in Africa (as of 2010, all of them are among the top ten largest banks in the world by consolidated assets) ^.6

The oldest bank, Societe Generale (established in 1864), is currently present in 12 countries of Tropical Africa-Benin, Burkina Faso, Cameroon, Ivory Coast, Guinea, Ghana, Equatorial Guinea, Senegal, Chad, Mauritania and Madagascar (all former French colonies except Ghana and Madagascar). Equatorial Guinea). In North Africa, SJ branches are located in Algeria, Egypt, Morocco and Tunisia, in South Africa-in South Africa. The scale of its operations in Africa exceeds the volume of its operations in other regions of the developing world. This applies both to the total volume of credit, loan and investment operations, and the size of the share capital of foreign branches of ^the bank7.

Credit Agricole Bank (established in 1920) operates in Algeria, Morocco, Egypt, South Africa, Djibouti and Madagascar. After the takeover of Credit Lyon (2003), which had branches in many countries of the continent (Cameroon, Cote d'Ivoire, Republic of the Congo (ROK), Gabon, Senegal, Tunisia, Libya, etc.), the scope of the banking group's activities significantly expanded. Since 2004, the group has included a new division - "Callon" - with broad powers in the field of investment banking and financial activities in foreign countries (it has branches in 8 African countries-Gabon, Cameroon, Kazakhstan, Senegal, Ivory Coast, South Africa,

Djibouti and Madagascar). In February 2010, Kalyon was renamed Credit Agricole SI B (Credit Agricole Corporate Investment Bank) ^.8

BNP-Paribas Bank (founded in 2000) has branches in 6 countries of the CFA franc zone - Senegal, Cote d'Ivoire, Burkina Faso, Gabon, Guinea and Mali, as well as in Mauritania, Djibouti, Madagascar and the Comoros. In addition, BNP-Paribas operates in South Africa and North Africa (Morocco, Algeria, Tunisia, Libya and Egypt) ^.9

French banks still play an important role in African countries - former French colonies that are part of the CFA franc zone. Despite some gradual reforms aimed at giving the zone's member countries greater monetary and financial independence, the French National Welfare Bank generally manages to maintain its priority areas of influence here by constantly expanding its network of foreign branches and branches in the least developed countries of Africa. Significant government involvement in the French credit and banking sector is also important (compared to other developed countries), which leads, in particular, to additional financial opportunities for the development of the network.

There is also a long history of presence in Africa and the two largest British banks - "Barclays Bank" and "Standard Chartered Bank" ¹⁰. One of the oldest banks in the world, Barclays (3rd place in the world classification) has been represented in Africa for almost 100 years. The Bank has branches in 12 countries of the continent - in Botswana, Egypt, Ghana, Kenya, Nigeria, South Africa, Tanzania,Uganda, Zambia, Zimbabwe, Mauritius and Seychelles.

Standard Chartered has been present on the African continent since 1863, when it opened its first branch in Port Elizabeth (South Africa). Currently, the bank has branches in 14 African countries - including Botswana, Cameroon, Ivory Coast, Gambia, Ghana, Kenya, Nigeria, Sierra Leone, Tanzania, Uganda, Zambia, Zimbabwe, South Africa and Egypt.

In their current operating activities, British TNBS adhere to a balanced, pragmatic approach, based on a comprehensive analysis of the economic and credit-banking situation, with regard to expanding the volume of their current credit and investment operations in host countries. Despite the fact that, due to their historical ties with African countries, the banks of England and especially France continue to retain their traditional spheres of influence on the continent, in the last two decades, the tendency to expand the territorial boundaries of the peripheral expansion of TNB has become increasingly noticeable. So, French banks are trying to enter English-speaking countries-Nigeria, Ghana, Kenya, Zimbabwe, etc., as well as in the DRC, Egypt, and former Portuguese colonies. Similarly, the penetration of British banking capital in the franc zone countries (in particular, in Cameroon, Ivory Coast, Gabon and Senegal) and other territories of the continent is increasing. Thus, the previously rigid boundaries between the spheres of influence of former colonial Powers are gradually erased.

Until recently, the Belgian bank Belgolaise (founded in 1909) was one of the oldest European banks operating on the continent. The bank had subsidiaries in 16 countries of Tropical Africa (Burundi, Ivory Coast, Kazakhstan, Ghana, Tanzania, Togo, Uganda, Niger, Nigeria, Rwanda, In 2000, the Belgian Fortis Bank (founded in 1990) acquired 100% of the shares of Belgolez, and the latter became its subsidiary. In 2005, Fortis announced the termination of Belgolez's banking activities and the transfer of its assets to another bank, and in May 2009, in the context of the global financial crisis, Fortis Bank merged with the French bank BNP-Paribas and formed the BNP - Paribas Fortis financial group11.

Citibank (USA), Hong Kong Shanghai Bank Corporation (England), Novo Banco (Procredit) (Germany) and Millennium BSP (Portugal) are relatively new and unconventional Western TNBS that were established in the region in the last quarter of the last century.

One of the world's largest banks, Citibank (ranked 21st in the world classification), which started its operations in Africa in 1958 (UAS), currently has subsidiaries in 16 African countries, including Egypt, Algeria, Morocco, Tunisia, Nigeria, Ghana, Kenya, and Cameroon ¹² Of the other US TNBS represented in Africa can be called First National Citibank, Jeep Morgan Bank, Bank of America, but they are noticeably inferior in terms of the scale of their activities in the region to the international financial giant Citibank.

Hong Kong Shanghai Bank Corporation (17th place in the world classification) was established in Hong Kong in 1865. Today it is one of the most developed international banking structures, with an extensive network of branches (more than 9 thousand) in 85 countries of the world. It has been active in Africa (Egypt and Nigeria) since the 1980s, in South Africa since 1995, and in Algeria since 200813.

The Portuguese BSP Bank, founded in 1985, was renamed Millennium BSP in 2004 and has branches in Angola and Mozambique. German bank Novo Banco (Procredit) has launched operations in Ghana, Ivory Coast, Angola and Mozambique. Multinational banks from other developed countries (Japan, the Netherlands, Luxembourg, etc.) also operate in Africa, but they are still poorly represented.

NEW REGIONAL PLAYERS

In addition to the former colonial banks and other Western TNBS, banks in South Africa and Nigeria, as well as a number of banks from the Persian Gulf and South Asia, have become new players in the African banking market. Recently, they have been joined by some regional banks that show rapid growth in banking activity (such as Standard Bank Group (SBG), Bank of Africa and Ecobank Transneshnl).

Standard Bank Group (South Africa) - one of the 30 largest banks in the world and the first bank in Africa (with assets of $134 billion, 2008). Founded in 1862 in Cape Town. It has two main offices: a head office in Johannesburg and an international office in London, which operates in the markets of many developing countries. Currently, the banking group has more than 1,000 branches in 38 countries, including 17 African ones (Nigeria, Mozambique, Kenya, DRC, Namibia, Botswana, Angola, Ghana, Malawi, Zambia, etc.). The main shareholders of SBG are the Industrial and Commercial Bank of China (the world's largest bank by market capitalization), which in 2008 acquired 20% of the group's shares for approximately $ 5.6 billion; South African Public Investment Corporation (12%) and Old Mutual Investment Group (4%). The geography of the bank's foreign operations is very extensive - from Brazil and Argentina to Turkey, Russia and China. The Bank has a subsidiary in Russia, CJSC Standard Bank, which mainly specializes in providing investment consulting services in the mining, oil and shipbuilding industries. In 2009 The bank acquired a 33% stake in Troika Dialog, one of Russia's leading investment banks, for $200 million. ¹⁴

The Bank of Africa (BOA Group) was founded in 1982 in Mali. Its actual growth began in 1989 with the establishment of its first branch in Cotonou (Benin). Currently, the group has 230 offices in Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, DRC, Burundi, Kenya, Tanzania, Uganda and Madagascar. There is a representative office in France. BOA Group's long-term strategy is to expand its presence in Africa, in particular by strengthening its position in East Africa and the Indian Ocean, where it already has offices in five countries, as well as in North Africa. In 2008, BOA Group entered into an alliance with the largest Moroccan foreign trade bank BMKE , its main shareholder. This alliance was created primarily to significantly increase funding for BOA Group's activities aimed at developing its network of branches and branches, as well as strengthening the group's position in Africa. One of the most recent transactions (August 2010) was the acquisition by the group of a branch of Credit Agricole Bank in Djibouti ¹⁵.

Ecobank International Group (registered in Togo) was established in 1985 on the initiative of the Federation of West African Chambers of Commerce and Industry with the support of the Economic Community of West African Countries (ECOWAS). The first branch was opened in 1988 in Lome (Togo). Today, the group has 750 offices in 31 African countries (the latest in this list was Angola in August 2010). By the number of member countries, it is the largest regional banking group in Africa, and by the scale of operations, it is the leading banking group in the CFA Franc area and ECOWAS. Ecobank operates not only in West and Central Africa, but also in other regions of the continent. It has a branch in France and representative offices in Dubai (UAE) and Johannesburg (South Africa). In 2010, a cooperation agreement was signed with the South African insurance company Old Mutual, as well as with the Bank of China.

Ecobank Group is listed on the Lagos, Accra and Abidjan Stock Exchanges ¹⁶.

Thus, today the banking sector in Africa is characterized by increasing transnationalization not only through the expansion of the network of branches of the world's largest TNBS, but also through the rapid growth of local banking groups. According to analysts, Western multinational groups are facing increasing competition for the most attractive banking markets in Africa with ambitious regional and pan-African players.¹⁷

MERGERS AND ACQUISITIONS

One of the features of the expansion of foreign banking capital in Africa is that now international banks and banking groups are penetrating, and then expanding their presence and scale of investment activities in the credit and banking structures of host countries (local commercial banks and development investment banks). Whereas in the 1990s, foreign banks mostly established subsidiaries in Africa, they have more recently started mergers (and acquisitions) of their subsidiaries with local controlled banks, following the trend towards global consolidation. Thus, in 2007, Barclays acquired 100% of the shares of the Ugandan bank Niall Bank (the seventh largest bank in Uganda). In 2006, Standard Chartered Bank bought 25% of the shares, and in 2009 - already 75% of the share capital of a large investment holding First Africa Group Holding Ltd (South Africa) with branches in 14 African countries.

Strong regional players are also trying to strengthen their footprint, including Standard Bank of South Africa, which acquired a majority stake in IBTK Bank, a major investment bank in Nigeria, in 2007. In the same year, Standard Bank acquired control (60% of the shares) of KFC Bank (Kenya), combining it with its local branch Stanbik, and even earlier bought 100% of the shares of the largest bank.-

Commercial Bank of Uganda (after its first unsuccessful privatization and subsequent nationalization). Over the past years, Standard Bank has not only fulfilled its obligations not to close existing branches of the bank, but also opened new ones, increasing lending to the agricultural sector.¹⁸

One of the most notable events of recent years in the regional banking market of mergers and acquisitions is the acquisition by Ecobank in 2008 of a controlling stake in the Kenyan bank IABS Bank (75%) and Bank of Malawi Lolta Bank (73%), and in 2007 - the international Bank of the Central African Republic (75%) and Rwanda Trade, Development and Industry Bank (90%). Ecobank, which is traditionally active in West and Central Africa, is increasingly positioning itself as a pan-African bank. In December 2009, a partnership agreement was signed with South African bank Nedbank. According to an Ecobank representative, "the African banking landscape is changing, and only banks with a pan-African reach will remain competitive." ¹⁹

IMPACT OF THE GLOBAL CRISIS ON FOREIGN BANKS

The issue of the impact of the global financial and economic crisis on African countries is covered in detail in the Russian literature, ²⁰ but little is known about its impact on the banking sector of African countries, in particular on branches and branches of multinational banks. Meanwhile, the global financial crisis, which has reached Africa, has raised the question of the future of foreign subsidiaries in the region as follows: should we expect their activities to be curtailed in light of the problems of their parent organizations, or, on the contrary, will they be able to expand their presence in credit and banking markets that have suffered relatively little from financial instability?

The past three years since the beginning of the global crisis already allow us to draw some conclusions. The most serious consequences of the crisis were reflected in the economic and especially social spheres of African countries, with almost no impact on their financial structures. The relative stability of the latter reflects several factors, including: limited, though growing, integration into global financial markets; minimal commitment to the use of complex financial instruments, such as derivatives, mortgage-backed securities, etc.; relatively high bank liquidity; limited reliance on foreign investment and low solvency of local financial institutions. The only exceptions were African countries with relatively developed financial markets, such as South Africa and Nigeria, which were the first to feel the impact of the crisis.

As for the foreign segment of credit and banking systems in Africa, there is no information yet (or even signs) about the curtailment or closure of any subsidiaries and branches of TNB as a result of the crisis, even in cases where their parent organizations were in a difficult financial situation. Moreover, some TNBS (such as, for example, Standard Bank Group) expanded their involvement in the region through successful M & A operations ²¹.

Using the example of 4 emerging and frontier African countries (Ghana, Kenya, Nigeria and South Africa), the IMF experts analyzed the impact of the global crisis on their financial systems, including the situation of local branches of TNBS. They concluded that the crisis had a very moderate impact on local branches of international banks for three reasons::

- subsidiaries of large TNBS practically do not depend on financing their funds from parent banks, relying on a solid internal deposit base;

- there is no practice of transferring capital (except for the usual ones) from subsidiaries to parent banks;

- in some cases, the credit policy of TNB branches has become more prudent due to stricter requirements for regulating capital shortages in the parent country22.

Of course, the predominance of foreign banks in a particular country is always associated with the risks of capital repatriation in the event of the closure of local branches, especially in a crisis situation with the parent banks. In Africa, however, analysts say this risk is mitigated by the fact that many of the foreign banks ' operations here are profitable, even though their assets represent only a small fraction of those of the parent banks.

In general, despite the crisis and the growing competition from regional banking groups, Western multinational banks are feeling stable in Africa, constantly expanding the scope of their operations and geographical coverage as part of the global strategy of TNB aimed at further involving the continent in the system of world economic relations.

^{Honohan P.} 1, Beck Th. Making Finance Work in Africa. World Bank, Wash., 2007, p. 94.

² For more information, see: Degtyarev D. A. "Banking Landscape" of Africa // Asia and Africa Today, Moscow, 2004, N 3; African banks at the beginning of the XXI century // Mirovaya ekonomika i mezhdunarodnye otnosheniya [World Economy and International Relations].

³ Finance in Africa: Achievements and Challenges. World Bank, WP, 2009, p. 23.

^{Honohan P.} 4, Beck Th. Op. cit., p. 43.

^{Pavlov V. V.} 5 Politika tnatsionalnykh bankov v Afrika [Policy of transnational banks in Africa]. Moscow, 2000, pp. 90-91.

⁶ www.bankersalmanac.com/13.05.2010

⁷ www.socgen.com

⁸ www.credit-agricole.com/en/news/caly-on/2010

⁹ www.bnpparibas.com

¹⁰ www.barclays.co.uk; www.standard-chartered.com

¹¹ www.fortisbank.com/20090519

¹² www.citibank.com

¹³ www.hsbc.com

¹⁴ www.standardbank.com/global/news_centre/

¹⁵ www.bank-of-africa.net;www.credit-agricole.com/en/news2/2010/aug

¹⁶ www.ecobank.com/upload/2010

¹⁷ Into Africa: Investment Prospects in the Sub-Saharan Banking Sector. L., 2009, p. 13.

¹⁸ Ibid., p. 11.

¹⁹ Ibid., p. 11,12.

²⁰ Finansovo-ekonomicheskiy krizis: afrikanskii opekt [Financial and Economic Crisis: an African option]. 2009, N 5; Abramova I. O. Global economic crisis and African countries // World economy and International relations. 2009, N 9; Fituni L. L. Mesto Afrika v postkrizisnoy mirovoy ekonomike [Africa's place in the post-crisis world Economy]. 2011, N 1, 2.

²¹ www.businessworldng.com/web/article s/2010 - 03 - 15

²² Regional Economic Outlook: Sub-Saharan Africa. IMF, Wash., 2009, p. 35.

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