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The Prudential Authority (PA), the financial regulator that falls under the auspices of the SA Reserve Bank (SARB), has withdrawn permission for BNP Paribas SA to conduct business by means of a bank branch.
Deputy governor of the SARB, Fundi Tshazibana, who is also the CEO of the PA, announced the withdrawal in a notice in the Government Gazette published on 19 April. The withdrawal took effect from 8 March with notice given under the Banks Act.
The Paris-headquartered group has a presence in almost 70 countries and had been granted a branch licence in 2012. That allowed it to convert its representative office, based in Melrose Arch in Johannesburg, into a full commercial branch offering corporate and investment banking services.
While BNP Paribas had not yet responded to questions seeking clarity on why the PA withdrew permission for it to operate as a bank by means of a branch in SA, it comes at a time when international banks are downscaling their exposure to Africa. Standard Chartered announced in April 2022 that it would strategically divest from Angola, Cameroon, the Gambia, Sierra Leone and Zimbabwe and exit its Consumer, Private and Business Banking in the Ivory Coast and Tanzania.
READ | As international lenders exit, African banks take the gap
In 2021, Britain's Atlas Mara announced plans to withdraw from Africa after acquiring banks in seven markets on the continent. It put the withdrawal down to unstable currencies and the challenging macroeconomic environment.
In 2016, Barclays announced plans to significantly sell down its majority stake in Barclays Africa, a joint venture with Absa. In 2022, it also sold off its remaining stake in Absa.
In 2010, HSBC walked away from an $8-billion bid to take a majority stake in Nedbank.
