Zenith Bank, Nigeria's second-largest lender by market capitalisation, is eyeing expansion in Ethiopia as the country opens up its banking and financial services sector to foreign lenders, Ethiopian Business Review reported on Thursday.
The move puts Zenith among a growing group of African banking giants poised to enter one of the continent's last major closed financial markets.
Over the past 10 months, Kenya's KCB Group and Equity Group, Djibouti's Banque pour le Commerce et l'Industrie Mer Rouge (BCIMR), and South Africa's Standard Bank Group have shown interest in Ethiopia.
If completed, Zenith's entry would be one of the most significant moves by a pan-African lender since Ethiopia formally opened its banking sector to foreign participation in June 2025 after five decades of state control.
Zenith is not the only Nigerian lender eyeing the market. In January, FirstBank, Nigeria's oldest financial institution, also expressed interest in expanding into Ethiopia, Africa's second most populous country.
According to the English-language business magazine, Zenith's interest follows high-level discussions between senior officials of the Ethiopian Investment Commission (EIC) and the Lagos-headquartered lender on the opportunities created by reforms in the country's financial sector.
EIC Deputy Commissioner Zeinabu Yirga said the government is actively attracting global financial institutions to deepen capital markets, promote competition and modernize financial services.
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He said Ethiopia's position as the third largest economy in Sub-Saharan Africa provides strong fundamentals for expanding trade relations, large-scale infrastructure investment and industrial growth as well as long-term financial sector investments.
Olukayode Akinbinu, group head of overseas branches and international market expansion at Zenith Bank, said the lender is assessing entry routes into Ethiopia, citing the pace of reforms, unmet demand for sophisticated financial products and rapid digital adoption.
He said Zenith is particularly focused on digital banking platforms, technology-driven financial services and financing of large government-led and infrastructure projects.
Established in 1990 and headquartered in Lagos, Zenith operates over 500 branches and business offices across Nigeria.
Internationally, it has subsidiaries in Ghana, Sierra Leone and the Gambia, as well as a representative office in China. Its UK branch, Zenith Bank (UK) Limited, was licensed in 2007 and listed shares worth $850 million on the London Stock Exchange in 2013.
In July, reports emerged that the bank was in advanced talks to acquire a tier-two Kenyan lender as part of its broader expansion into African, European and Asian markets.
Zenith became the first Nigerian bank to record trillion-naira profit last year, reporting N1.03 trillion ($673.6 million), slightly ahead of GTCO's N1.02 trillion ($667.1 million).
However, the lender posted its first half-year profit fall in a decade in the first half of this year, as rising interest costs and impairment charges hit earnings.
Profit after tax fell 7.9 percent to N532.2 billion ($372.4 million) in the six months to June from N577.9 billion ($384.4 million) a year earlier.
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Ethiopia's banking sector transformation
Ethiopia currently has 32 banks, most of which are relatively small, with the state-owned Commercial Bank of Ethiopia accounting for about 22 percent of total sector assets.
With a population of over 130 million, Ethiopia is Africa's second most populous country and one of its fastest growing economies. The International Monetary Fund projects average annual growth of 7.4 percent between 2025 and 2030, underscoring the long-term appeal of the market.
Financial sector liberalization is already reshaping domestic banking. Bank of Abyssinia recently registered with the Ethiopia Capital Market Authority, indicating plans to move into investment banking.
It joins Awash Bank, making them the only two private lenders currently preparing investment banking operations under the new framework.
Reflecting these improvements, Ethiopian lenders dominated the list of Africa's top 10 biggest climbers in the African Business Top 100 African Banks 2025 ranking. Awash International Bank, Bank of Abyssinia and Dashen Bank climbed 18, 17 and 16 places to 50th, 72nd and 71st respectively.
“East Africa is the next best-represented region with 21 entries, led by Kenya with ten,” the report said. “The number of Ethiopian banks has grown to six, from five last year and to just two in 2022, reflecting deregulation and intense competition.”
As reforms accelerate, foreign banks are lining up
Foreign interest follows Ethiopia's sweeping economic reforms aimed at modernizing an economy long dominated by state control.
Key measures include floating of the Birr, launch of securities exchange and introduction of central bank policy rate to maintain price stability.
A significant change came in June 2025, when Ethiopia opened its banking sector to foreign lenders for the first time in 50 years, generating strong interest among regional and continental banking groups.
For decades, foreign banks were limited to representative offices and barred from offering banking services – a protectionist policy that hindered Ethiopia's financial depth despite its position as Africa's fifth-largest economy.
The pace of reform has accelerated under Prime Minister Abiy Ahmed, who took office in 2018 and has focused on attracting foreign investment and integrating Ethiopia into the global economy.
A major milestone was the passage of Banking Business Proclamation No. 1360/2024 in December, which laid the legal foundation for financial sector openness.
