Major European bank BNP Paribas shuts down SA operation

International bank BNP Paribas has announced it is pulling out of South Africa.

The Paris-based multi-national is closing its corporate and investment banking services 12 years after launching its local venture.

The approval from the regulator came through in April 2024, a spokesperson told Bloomberg News, who describes the move as another European bank scaling back on the African continent.

While the development is negative for us, it's not necessarily all South Africa's 'fault' Kokkie Kooyman tells the The Money Show.

The regulator has made it more difficult for banks to have offshore operations, notes the Executive Director and Portfolio Manager at Denker Capital.

At the same time, banking in Europe is still only preparing to be unified, and banks in turn could be preparing for this themselves.

Kooyman points out that other institutions like Société Générale and HSBC have also been selling operations in various parts of the world.

"They say, can we use this capital better that at the moment is deployed in Africa and in our case now SA... And I think part of this is preparation for unification of banking in Europe... and getting a bigger banking presence there."

"BNP Paribas have also sold their operations in the US."

Kokkie Kooyman, Executive Director - Denker Capital

Having said that, Kooyman adds, he does think our government has shot itself in the foot.

The fact is that South Africa has become a lot less attractive than it was five, or ten, or 15 years ago.

"Our growth rate has come down; our debt ratio has gone up... A lot of things the present government is doing actually stops money coming into the country, in terms of the visa requirements, everything..."

"I think when they sat in Paris and said: What do we do, how much is SA going to grow... they decided to rather focus on where they have more certainty."

Kokkie Kooyman, Executive Director - Denker Capital