Tanzania and Kenya Top Africa in Financial Services Returns, BCG Research Finds

Tanzania and Kenya have emerged as Africa’s top-performing financial services markets, delivering Total Shareholder Returns (TSR) that surpass both the continental average and the global benchmark.

Tanzania posted 59% TSR over the three years from December 2022 to December 2025, while Kenya recorded 36%, both significantly ahead of the 23% global average and South Africa’s 24%. The findings challenge long-held assumptions about where financial value creation is concentrated on the African continent.

These are among the findings of the 2026 Future of Finance report from Boston Consulting Group (BCG), released today. The report analyses performance data across financial institutions globally including banks, asset and wealth managers, and payments companies drawing on S&P Capital IQ data for the period 2020 to 2025.

“Tanzania and Kenya’s strong performance over these three years reflects more than cyclical tailwinds. Tanzania delivered the strongest returns of any market in Africa. Kenya — the country that took financial exclusion from 50% to 10% in two decades — is showing what a maturing financial system can deliver. East African institutions have earned the right to be bolder on growth and innovation.” said Henok Eyob, Managing Director and Partner BCG Kenya.

East Africa Outperforms, While Investor Confidence in Tanzania Reaches Near-Developed-Market Levels

Beyond TSR, BCG’s data points to deepening investor confidence in East African financial institutions. As of December 2025, 99% of Tanzania’s listed bank equity trades above book value, one of the highest rates in Africa, on par with Canada (99%) and the United States (98%). This reflects strong profitability fundamentals and sustained investor confidence in the market.

Kenya’s financial services sector tells a different story of momentum: one driven by the deep integration of mobile money and digital ecosystems. Platforms like M-PESA have enabled broader financial services access across the economy, creating a strong link between fintech innovation and financial performance that underpins Kenya’s above-average returns.

Zooming out, financial institutions were the top-performing sector globally in 2025, with a trailing 12-month TSR of 30.2% ahead of information technology (26.8%) and other industries (~17.0 %). East Africa’s outperformance sits within this broader global picture of financial sector strength.

From Strong Performance to Structural Leadership

BCG’s analysis shows that Africa’s financial institutions have made meaningful productivity gains, with the continent’s operating expense-to-asset ratio improving by 20 basis points over 2020–2025, ranking second globally, behind only China’s market-leading improvement of 29 basis points.

BCG identifies the following imperatives for banks in its 2026 Future of Finance report.

• Organisations need to use AI to reset productivity structurally, not incrementally. Most recent profitability gains reflect income uplift combined with cost containment – rather than structural transformation of the operating model. Winning financial institutions are focusing on structural operating model redesign rather than incremental cost cutting, shifting technology spending from run-the-bank to change-the-bank, simplifying product and tech architecture, and embedding AI in day-to-day work with clear economic ownership.
• Rebalance capital toward tech-led growth. After years of industry emphasis on cost, growth is reemerging as the more powerful value lever for institutions trading above book. Sustaining recent value creation will require a renewed focus on growth and corresponding shifts in capital allocation.
• Plot an active M&A portfolio strategy. For the first time in more than a decade, valuations, capital headroom, and investor expectations for financial institutions align in favour of active portfolio reshaping. This includes increasing scale in the core; expanding into attractive pockets of value; and divesting to optimise portfolios.
• Position early where disruptive trends intersect. AI, nonbank financial institutions, and digital assets continue to disrupt the financial institution landscape, but their most significant impact has yet to emerge. Their combined impact will influence competitive positioning, revenue models and operating models.
• Concentrate CEO-owned AI bets and get execution right. Winning institutions concentrate investment on a portfolio of six to eight high-impact bets chosen following a disciplined assessment of value impact, competitive advantage, reusability, and time horizon. CEOs must take direct ownership of this transformation.

The Middle East and Africa fintech market grew approximately 20% in 2025, supported by mobile money, digital wallets, and expanding financial inclusion. BCG and FT Partners’ 2026 Global Fintech Report identifies B2B financial services, lending, and insurance as the largest remaining growth opportunities in the region.

“In the AI era, the binding constraint is no longer just capital or connectivity — it is high-quality judgment at scale. East African financial institutions have built remarkable digital foundations over the past decade, and the opportunity now is to use AI and innovation to move from strong performance to structural leadership. That means deepening platforms, scaling fintech ecosystems, and embedding AI into core operations to drive the next phase of growth across the region,” said Henok Eyob.

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