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Absorption and profitability: evidence from the expansion of pan-African banks

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  • Germain Lankoande
  • Kevin Moran

Abstract

Several local banks in the West African Economic and Monetary Union (WAEMU) were absorbed (acquired) by pan-African banking groups over the last two decades. These acquisitions occur in the context of a rapid and ongoing expansion of these banking groups that is transforming Africa’s banking landscape. This paper estimates the impact of two waves (2013 and 2017) of absorption of local banks by pan-African banking groups on the absorbed banks’ profitability, using a dynamic difference-in-differences method that allows for heterogeneous treatment effect. We find the absorption treatment has positive and significant impacts on the return on assets of local banks, but negative ones on their return on equity. This suggests that pan-African banking groups successfully operate the local banks they absorb but do so at lower returns for the capital engaged in these banks.

Suggested Citation

  • Germain Lankoande & Kevin Moran, 2026. "Absorption and profitability: evidence from the expansion of pan-African banks," Applied Economics Letters, Taylor & Francis Journals, vol. 33(6), pages 888-892, March.
    • Handle: RePEc:taf:apeclt:v:33:y:2026:i:6:p:888-892
    DOI: 10.1080/13504851.2024.2399744
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