20110304
reuters

JOHANNESBURG (Reuters) - Africa's $107 billion financial services industry will log impressive growth for the rest of the decade as more banks target the continent's emerging middle class, a study by consultancy Bain & Company found.

Retail banking will see the biggest growth, and will account for nearly 40 percent of the continent's banking revenue by 2020, helped by rapid adoption of mobile phone banking, Bain said in the study released ahead of next week's Reuters Africa Investment Summit.

The opportunities and challenges presented by this bourgeoning African market will be addressed by executives, investors and politicians at the summit, being held March 7-10 in Johannesburg, Nairobi and Lagos.

Africa is home to a billion people, vast commodity wealth and rising disposable incomes -- as well poor infrastructure and often shoddy corporate governance -- making the continent both a substantial opportunity and challenge for regional and global financial firms.

"The prospects for banking on the African continent are tremendous," said Sim Tshabalala, deputy CEO of Standard Bank, Africa's largest bank by assets, in an interview with Reuters on Thursday.

"But to be able to compete in Africa you need people on the ground who know the terrain."

Bain Partner Andrew Tymms said the continent's financial services industry will continue to grow at a compound annual rate of 15 percent to 2020, outpacing gross domestic product growth.

"Retail banking will grow faster than corporate banking ... to make up 38 percent of banking revenue by 2020, bringing in the previously unbanked population and shifting the experienced to sophisticated products," Tymms said.