money

Beltone is a financial services group with 24 diversified funds and more than 100,000 clients. Khalil El Bawab, CEO of the Local & Regional Markets Division, shares the firm’s growth plans and challenges with Global Finance.

Beltone began in Cairo in 2002 as an asset management firm. In 2022, it was acquired by Emirati Chimera Investment, part of Abu Dhabi-based IHC. Since then, Beltone has completed two record capital increases—EGP 10 billion (about $210 million) in 2023, which at the time was the largest in Egyptian Exchange (EGX) history, and EGP 10.5 billion in 2025, which is now the record for the largest all-cash capital increase on the EGX. Today, Beltone is part of IHC’s new entity, 2PointZero, alongside eight other companies.

Global Finance: How is Beltone Holding currently structured?

Khalil El Bawab: Beltone is a fully fledged institution offering a wide range of services, including investment banking, brokerage, asset management, and custody services. Additionally, Beltone provides various non-banking financial services such as leasing, factoring, consumer and mortgage finance, SME finance, and microfinance. The organization also has a venture capital company that invests in startups through equity and venture debt. Beyond finance, Beltone has expanded into non-financial sectors, with businesses like Robin, which offers Data Science and AI solutions; Beltone Academy, focused on training and development; and Magnet, a human resources consultancy.

GF: What is your approach to the client’s needs?

Bawab: Traditionally, financial services were about selling products. However, amid the market’s emerging financial literacy levels, we shifted our focus on redefining the need. At Beltone, we pinpoint other needs for the clients and then we engineer tailored products around them. Here again, the approach is fully data-driven. For example, clients might not be aware of how to maximize their returns by moving their investments around between equities, fixed income products, precious metal funds, and other channels. Once the investor becomes aware of these diverse offerings and is aware of the ease of investing with Beltone, their need is redefined and met with a tailored portfolio of investing options. Credibility comes not from pushing the highest-commission product, but from ensuring that 5, 10, or 15 years later, clients can say they fulfilled their needs.

GF: How is the regulatory landscape supporting Beltone’s growth?

Bawab: The asset management industry in Egypt changed significantly in 2018. Before then, only banks and insurance companies could issue or sponsor funds. The new regulations allowed asset managers and investment banks to launch their own funds and brokerage firms to act as placement agents. This is a true milestone for the industry, allowing financial service providers to bridge the gap in terms of physical barriers, paperwork, and user experience for clients looking to invest.

Then, issuing a fund could take up to a year; now it takes just a very few days. Since then, more than 50 new funds have started, and that has completely changed the market. Also, the financial regulatory authority issued the FinTech License, which allows digital onboarding, including e-signatures and e-contracts, to help attract more investors to the market, effectively taking the market to new levels.

GF: You manage a large number of funds–why so many?

Bawab: We currently manage 24 funds, including 15 for banks, and plan to launch 5–6 more. All our funds have zero subscription or redemption fees — no entry or exit barriers. The market sees us as simply launching fund after fund, but it’s a conscious strategy and preparation for our upcoming wealth management application.

Today, we already offer the Beltone Trade App — the only investment bank-owned app not tied to a bank, giving qualified investors direct access to equities, fixed income products, and mutual funds. In early 2026, we’ll launch a second app that goes beyond robo-advisory. Clients will be digitally onboarded, complete a risk profiling exercise, and receive personalized advice on the optimal allocation for their investments. It could be single investments or incremental, with standard settlement instructions every month… I’m not concerned which channel the clients go to, but I want to equip them with the right tools to choose the products that best fit their needs.

GF: Who are the clients that you’re targeting?

Bawab: Generation Alpha. The ones who live on smartphones — they research everything and don’t want to interact with any human being. In fact, studies show people would rather visit the dentist than go to a bank! Egyptian law now allows 15-year-olds to open bank accounts and invest in the stock market. Our goal is to incentivize this generation early, with incremental investment plans matched by their guardians up to a limit. By starting at 15, we’re preparing the next driving force of our client base for the coming 10–15 years.

GF: Sounds like you are facing a huge financial literacy challenge.

Bawab: Sure, but you have it at all ages, and overall financial literacy in Egypt is improving rapidly. We are seeing tremendous growth in the number of new entrants opening brokerage accounts or participating in the stock market & mutual funds. We are still behind international standards, but our market growth is outpacing global benchmarks in terms of market participation. This is a collective effort that everybody is working on. The focus now is on making investing simpler and more accessible — and our upcoming wealth management app is designed to be exactly that: super simple and straightforward.

Emerging markets are navigating new risks from tariffs.

Because many emerging market countries rely heavily on exports, their economies and banking systems face heightened risk from the imposition of US tariffs. With this segment representing some of the largest trading partners of the US, including China, South Korea, and Taiwan, tension surrounding trade negotiations continues to escalate—particularly with China, following the US administration’s most recent threat of 100% tariffs on Chinese imports. Notably, institutions in these three countries represent half of our 50 Safest Emerging Markets banks. South Korean banks claim the top three positions and place nine overall, while China and Taiwan place eight banks each among our rankings.

In every country impacted by US tariff policy, the banking sector must navigate the collateral damage its clients experience due to disrupted trade flows and supply chains. For emerging market economies, the declining value of the US dollar softens some of this impact through relatively cheaper import costs in these markets and eases dollar debt service for those countries and corporations with outstanding dollar-denominated debt. Not surprisingly, emerging market GDP growth expectations have fallen. In the October edition of its World Economic Outlook, the International Monetary Fund forecasts a decline for the emerging market and developing economies from 4.3% in 2024 to 4.2% in 2025 and 4% by 2026.

The GDP decline forecast for China is more pronounced, with 5% growth in 2024 falling to 4.8% in 2025, and further to 4.2% in 2026. An overall deterioration in China’s credit fundamentals prompted Fitch to downgrade the country’s sovereign rating in April to A from A+. As a rationale for the move, the agency cites “a continued weakening of China’s public finances and a rapidly rising public debt trajectory during the country’s economic transition.”

“Sustained fiscal stimulus will be deployed to support growth, amid subdued domestic demand, rising tariffs, and deflationary pressures.”

Fitch Ratings

Fitch adds that “this support, along with a structural erosion in the revenue base, will likely keep fiscal deficits high.” Following this action, the agency downgraded China Development Bank (its ranking fell to No. 13 from No. 8 last year), Agricultural Development Bank of China (to No. 14 from No. 9), and Export-Import Bank of China (to No. 15 from No. 10).

Moody’s upgraded Saudi Arabia’s sovereign ratings in November, with the view that the kingdom’s progress in economic diversification will be sustained, further reducing its exposure to oil market developments and providing a more conducive environment for sustainable development of the country’s nonhydrocarbon economy. Meanwhile, S&P recognized the country’s sustained socioeconomic and capital market reforms with a March 2025 upgrade. Bank upgrades followed, allowing Saudi National Bank to climb to No. 25 in our rankings from No. 35 last year, Al Rajhi moved up to No. 26 from No. 36, and Riyad Bank is now No. 36, up from No. 49.

The kingdom doubled its representation in our rankings to six banks, as Saudi Awwal Bank (No. 41), Banque Saudi Fransi (No. 43), and Arab National Bank (No. 45) are new to the Top 50 this year. Consequently, these moves pushed Ahli Bank, China Merchants Bank, and Banco de Credito e Inversiones from our rankings. Moody’s upgrades provided the catalyst for upward shifts in our rankings. Better credit fundamentals at Emirates NBD Bank, based in the United Arab Emirates (UAE), allowed the bank to rise eight places to No. 17; while Taiwan’s E.SUN Commercial Bank’s improving business franchise, robust risk management, and corporate governance helped move the bank up nine places to No. 30.

Global Finance’s rankings expand from 50 to 100 of the safest banks.

The global banking sector faces major challenges as economies worldwide navigate volatility driven by US tariff policies and intensifying competition that is reshaping bank strategies and business models. Against this backdrop, our 2025 rankings expand the World’s Safest Banks from the Global Top 50 to the Top 100, offering a broader view of the sector and deeper insight into its resilience.

Washington’s evolving tariff policy and the resulting disruptions to global trade and supply chains have fractured economic ties among the largest US trading partners, contributing to upward pressure on inflation and to diminished global growth. These represent persistent issues that are likely to grow as the full effects of tariffs take hold. According to the World Trade Organization (WTO), the October forecast for growth in global trade volume in 2025 rose to 2.4% from 0.9% in August, mainly due to the front-loading of imports into the US ahead of announced tariffs. The WTO outlook for 2026, however, is more muted, with trade volume growth falling to 0.5%.

The September economic outlook of the Organization for Economic Cooperation and Development (OECD) projects global GDP growth to decrease from 3.3% in 2024 to 3.2% in 2025, and to 2.9% in 2026. Regionally, growth in the US economy is forecast to fall from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026 while euro area GDP growth is expected to be 1.2% in 2025, declining to 1% in 2026. China is facing a possible contraction from 4.9% GDP in 2025 to 4.4% in 2026.

As this year has unfolded, many of the world’s central banks are firmly in an easing cycle, with broadening global rate cuts to spur their respective economies. The institutions at the forefront in providing the most effective service offerings continue to invest in technology to aggressively transform their business models beyond their current digital platforms and online capabilities. Increasingly these banks are utilizing generative artificial intelligence (GenAI) to accelerate this transformation by leveraging data analytics to quickly identify new solutions to drive growth and uncover cost efficiencies.

The Global Top 100

Frequently, changes in a country’s sovereign rating provide the catalyst for year-over-year shifts in our annual rankings. Notably, Moody’s downgraded France to Aa3 from Aa2, citing the country’s fiscal challenges with deficit reduction and weakening public finances. Bank downgrades followed, given reduced government-support uplift to the ratings under the agency’s methodology. Consequently, Caisse des Depots et Consignations fell to No. 29 from No. 11, SFIL dropped to No. 47 from No. 19, BNP Paribas fell to No. 60 from No. 48, Credit Agricole fell to No. 61 from No. 49, and Banque Federative du Credit Mutuel fell to No. 62 from No. 50.

Similarly, following Fitch’s April 2025 downgrade of China due to weakening public finances, follow-on downgrades kept Chinese banks lower in the rankings, with China Development Bank at No. 73, Agricultural Development Bank of China at No. 75, and Export-Import Bank of China at No. 76.

On a positive note, Saudi Arabia benefited from a Moody’s upgrade to Aa3 from A1 in November 2024, with the agency citing progress on economic diversification. S&P recognized the country’s sustained socioeconomic and capital market reforms with a March 2025 upgrade to A+ from A. These moves allowed two banks to enter the top 100: Saudi National Bank at No. 99 and Al Rajhi Bank at No. 100.

In Canada, National Bank of Canada’s progress in growing its franchise to expand beyond its home market of Quebec prompted an S&P upgrade that moved the bank to No. 44 from last year’s No. 68. At Toronto-Dominion Bank, anti-money laundering deficiencies prompted both Moody’s and S&P to downgrade the bank, resulting in a drop in its ranking to No. 41 from No. 21 last year.

Methodology

Our rankings apply to the world’s largest 500 banks by asset size and are calculated based on long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service. Under our methodology, we require a rating from at least two of these agencies. It’s important to note that the largest 500 banks with at least two agency ratings are sourced from a universe of approximately 1,000 banks, as not all banks hold two agency ratings. Where possible, ratings on holding companies rather than operating companies are used; and banks that are wholly owned by other banks are omitted. Within each rank set, banks are organized according to asset size, based on data for the most recent annual reporting period provided by Fitch Solutions and Moody’s. Ratings are reproduced with permission from the three rating agencies, with all rights reserved. A ranking is not a recommendation to purchase, sell, or hold a security; and it does not comment on market price or suitability for a particular investor. All ratings in the tables were valid as of August 15, 2025.

Strengthened by recent profits, global banks enter a new phase defined by falling rates, political volatility, and the disruptive promise of AI.

Banks’ most basic job is to be a safe haven in a turbulent world. That turbulence is increasing.

Even so, the industry enters this uncertain period from a position of relative strength, buoyed by recent profits and a growing belief that artificial intelligence could unlock the next wave of efficiency and growth. Yet, this strong foundation now faces significant headwinds.

In recent years, rising interest rates have delivered wider margins and fatter profits for banks across much of the world. Now, however, rates are falling again. Meanwhile, US President Donald Trump is upending trade relations in the world’s largest economy, spreading uncertainty that could constrain credit appetite everywhere. In addition, China, the world’s second-largest economy, is stuck in a cycle of overproduction and underconsumption that its leaders appear unable to address.

Compounding these external challenges, nonbank lenders continue to seize market share—from corporate buyouts to family mortgages. Meanwhile, nonbank payment systems—ranging from stablecoins to sovereign digital currencies—provide alternatives to traditional interbank networks.

“We are living in a multi-shock world,” says Sean Viergutz, banking and capital markets advisory leader at consultant PwC.

Beyond these outside disruptions, the biggest shock of all is coming from within: AI. Bank managers are now rushing to apply Silicon Valley’s new magic to their back offices and, to some extent, client relations, showing an intensity that overshadows external concerns.

“AI is top of mind in almost every meeting out there,” says Amit Vora, Head of Sales – Regional Banks and Asset Managers, Crisil Intergal IQ, a division of Crisil (majority owned by S&P Global). “It’s part of the banking vocabulary more than risk and credit today.”

Rewards in the AI race are still some way off, cautions Alexandra Mousavizadeh, co-founder of Evident, a London-based consultant that tracks AI adoption in financial services. Revolutionary “agentic AI” systems are expected to come online only in 2028, though the tools are still evolving. Nevertheless, banks have little choice but to push forward, drawn by AI’s potential to cut costs and sharpen competitiveness. This transformative impact is driving major organizational changes.

“Once this hits the bottom line, the gap between leaders and laggards will become very clear,” Mousavizadeh forecasts.

Profits Up, Rates And Regs Down

Luckily, the last few years have left the industry with solid buffers against multiple shocks. Revenue at the 25 largest global banks jumped 9% in 2024. The biggest banks in the US and Europe—JPMorgan Chase and HSBC, respectively—both raked in record profits. And Europe has seen a banking renaissance since post-pandemic inflation forced the European Central Bank to raise rates after a decade of near-zero rates.

“We’ve been busy upgrading banks for years,” says Giles Edwards, sector lead for European financial institutions at S&P Global Ratings. “Things look OK from a fundamental credit perspective.”

The ECB has slashed its key rate in half to 2% since mid-2024. Banks can live with that, says Johann Scholtz, European bank analyst at Morningstar.

“There will be some pressure on net interest income, but I don’t think margins will collapse,” he predicts. The US Federal Reserve has cut rates by 125 basis points to 4.25% since August 2024. More rate cuts are expected this year.

Japan, the fourth-largest economy, is going the other way. The Bank of Japan shifted from negative rates to 0.5%. The economy returned to growth in 2024 after a recession. Markets expect the benchmark rate to reach 1% in 2026.

All of which is good news for banks, at least the big ones based in Tokyo, says Nana Otsuki, a senior fellow at Pictet Asset Management. “Broadly speaking, the banks are in good shape,” she says.

The global regulatory storm unleashed after the 2008 financial crisis is finally ebbing, if not reversing. European authorities are talking up “simplification” of oversight across industries. And the Trump administration is philosophically committed to deregulation, although specifics are rolling out more slowly than the industry might like.

Thawing relations with Azerbaijan and Turkey are creating opportunities for Armenia to expand its economy and emerge as a regional investment hub.

The South Caucasus has hardly seemed an ideal place for investment in recent years. Azerbaijan’s successful military campaign to gain control over the ethnic Armenian-controlled region of Nagorno-Karabakh within its borders in September 2023, forced about 110,000 residents to flee to Armenia. Georgia, once a poster child for reform with the area’s most diversified economy, has turned away from the west; its application to join the EU is suspended and tensions have run high since last fall’s disputed elections.

Unexpectedly, it is Armenia—landlocked, with 3 million people and able to export only through Georgia since its borders with Azerbaijan and Turkey are currently closed—that has emerged as the region’s bright spot.

Between 2022 and 2024, GDP grew by an annual 9%, and while the pace has slowed, growth remains well above most similar economies, with 5% expected this year and 4% next, according to the European Bank for Reconstruction and Development (EBRD). Inflation is running at around 3.6%, kept in check by a cautious monetary policy, and FDI is on a rising trend, with expatriate Armenians leading the way.

“Armenia has benefitted from a sizeable inflow of high-skilled immigrants, mainly from Russia,” notes Dmitri Dolgin, chief economist covering Russia and Commonwealth of Independent States (CIS) countries at ING Bank, “which has led to higher remittances, stronger activity in financial and IT sectors, and overall stronger domestic demand for consumer goods, services, and real estate.” Finance, IT, construction, and consumer demand-driven sectors have been the main growth drivers, he says.

The capital of Yerevan has been transformed into a regional magnet for startups and digital professionals, fuelling demand across sectors and lifting productivity, says George Akhalkatsi, head of the EBRD’s resident office there.

“The economic surge has been shaped by a unique convergence of external shocks, internal resilience, strategic adaptation, and a remarkable upswing in growth triggered by a wave of migration,” he says, echoing Dolgin’s observation. “This influx brought not only people but also capital, skills, and entrepreneurial energy, especially in tech and services.” 

An unexpected thaw in relations with Muslim-majority Azerbaijan could have major economic implications for Christian-majority Armenia, now that their three-decade conflict over Nagorno-Karabakh has been resolved.

Tensions ease

Thawing relations between Azerbaijan’s President Ilham Aliyev and Armenian Prime Minister Nikol Pashinian, beginning with the latter’s recognition of the reality of Azerbaijan’s decisive military victory, led to a peace agreement being concluded earlier this year. On August 8 the two signed the resulting treaty, overseen by President Donald Trump at the White House.

The accord lays the basis for development of the Zangezur transport corridor connecting Azerbaijan to its Nakhchivan exclave, sandwiched between Armenia and Iran, to be managed and developed by US companies working in conjunction with Yerevan. Dubbed TRIPP (Trump Route for Peace and Prosperity), the transit route aims to encourage a wider rapprochement between the two countries and throw open opportunities across the region. One analyst suggested that Armenia could “leverage the corridor to integrate into wider trade networks linking the Persian Gulf, Black Sea and Eurasian corridors, [helping)] diversify its economy, attract FDI, and normalize relations with its neighbors.”

The potential for an upset remains considerable, not least due to Armenia’s concerns about its sovereignty, although the involvement of US companies could partially assuage Yerevan’s fears. Sensitivities run high: when Aliyev used the term Zangezur—which has territorial implications for Armenia—in a press conference, Pashinian’s spokesperson said the “narrative presented cannot in any way pertain to the territory of the Republic of Armenia. Only the TRIPP and Crossroads of Peace projects are being implemented, as clearly stipulated in international documents.”

Such sensitivities matter, with parliamentary elections due next year in Armenia. Also of concern is Russian disquiet about its ally getting too close to Washington; Moscow has a military base in Armenia and supplies most of its energy while the country remains an active member of the Moscow-led Eurasian Economic Union (EAEU).

Observers nevertheless are excited about the possibilities.

“Baku has welcomed US involvement, particularly amid increased tensions with Moscow,” says Tinatin Japaridze, analyst at Eurasia Group. “Meanwhile Yerevan, which had previously expressed reservations about foreign oversight at its checkpoints, has reportedly received assurances that its sovereignty and territorial integrity will be fully respected. Discussions are now underway to select a private operator for the corridor.”

Arvind Ramakrishnan, director and primary rating analyst at Fitch Ratings, which rates Armenia BB- with a stable outlook, points to warming relations between Yerevan and Turkey, an ally of Azerbaijan, as evidence of a wider change within the region.

“The peace framework sets the stage not just for lasting settlement but also improved relations with Turkey,” he argues. “Pashinian and Turkish President Recep Erdoğan held a summit in Ankara in June, and the Turkish market is a huge opportunity for Armenia. Turks are also keen to invest there.”

Sectors that could benefit from Turkish investment include IT, construction, and finance, and small manufacturing and retail are other likely growth areas. Tourism may also benefit, with Turkish Airlines due to start direct flights between the two countries.

ING’s Dolgin lays out a wider menu of possibilities.

“If the peace process holds,” he suggests, “then logistics, warehousing, trucking/rail services, border services, and trade finance could gain, with positive spillovers to SMEs along east-west supply chains. Reduced uncertainty could also help FDI in light manufacturing and services that leverage Armenia’s skilled labor and diaspora links.” A reduced risk of hostilities could lead some Armenians living abroad to repatriate, along with their capital.

The EBRD notes that shipping via Georgia—Armenia’s main transit route at present—is expensive and slow, and that access to Azeri and Turkish ports through open borders with both countries would be beneficial.

“Armenia’s normalization of relationships with its neighbours is key, and the unblocking of regional trade and energy routes should support this process,” says Akhalkatsi. “Armenia has a great potential when it comes to renewable energy, and we could see significant FDI in solar power generation once there is capacity in the electricity grid to export this excess electricity.”

He points to the development of an AI supercomputing hub in Armenia, a mega project announced in July and valued at over $500 million, which could presage a significant increase in FDI while preparing the ground for further tech-sector development in the country and the wider region.  

The EBRD is one of the largest investors in Armenia, with nearly €2.5 billion (about $2.7 billion) committed across 231 projects, 84% of which support the private sector. Earlier this year, it launched a new strategy for the country focused on sustainable infrastructure and the green transition and boosting private-sector competitiveness. The bank is also deploying its flagship Capital Markets Support Programme, supported by the EU, in Armenia.

“The aim is to strengthen Armenia’s local capital markets by supporting corporate issuers of bonds and equity,” says Akhalkatsi. “The program addresses key challenges such as limited expertise in capital market financing and high issuance costs.” 

Challenges Ahead

Aside from maximizing opportunities arising from rapprochement with its neighbors, the government faces other, longer term challenges. Among them is unemployment of around 14%, a situation compounded by a skills mismatch due to years of underinvestment in training and the influx of ethnic Armenians from Nagorno-Karabakh. Integration of these refugees remains a major financial and political challenge.  

Energy dependence on Russia is another concern, although plans to replace the aging Metsamor nuclear facility with a new nuclear plant, along with ongoing renewable projects, aim to bolster long-term energy security. 

Fitch sees public finances as the main consideration in assessing such plans. “Public debt could hit 60% of GDP by 2030, so any development that slows or reverses this is positive,” says Ramakrishnan. If current hopes are realized, concerns like unemployment, underinvestment, and energy security will recede, he predicts. Lower defense spending would free up monies from the budget while improved relations with Azerbaijan and Turkey bolster trade and investment. Improved public-sector finances would also enable a greater focus on improving the business environment and governance, bolstering FDI across the economy over the long term.

North Africa is emerging as a growth engine, led by Egypt and Morocco. But structural challenges persist.

This year again, North Africa is the fastest growing region in Africa and the Arab world. Combined GDP growth in Mauritania, Morocco, Algeria, Tunisia, Egypt, and Libya is expected to reach 4% in 2025, compared to 3.9% for the rest of the continent and 2% in the Middle East, according to the International Monetary Fund.

They aim to keep the trend going. Despite differing economic trajectories, the six countries have signed multiple agreements over the years to boost trade. Chronic political tensions have limited the impact of these deals, and North Africa is far from being a unified market. But there is still growth potential.

In 2023, Egypt’s exports to North Africa reached a record $3.5 billion, or 9% of total exports. Trade with Morocco has nearly doubled over the past decade and Libya is Egypt’s largest regional export market, with many Egyptian companies playing a role in the war-torn country’s reconstruction.

In support of corporate activity, many of the region’s local banks have established a cross-border footprint. Attijariwafa Bank, Morocco’s leading institution, operates in Tunisia, Mauritania, and Egypt. Algerian banks have recently expanded into Mauritania and Tunisia’s Banque International Arabe de Tunisie (BIAT) which has offices in Libya.

“Many Tunisian SMEs export to Libya and vice versa, and this sector holds strong growth potential,” says Elyes Jebir, general director of BIAT, Tunisia’s largest bank by assets.

For now, Europe is still the main trading partner for North African countries, but Morocco and Egypt are also increasingly looking south of the Sahara for new ventures.

“Our added value is supplying safe and effective products at an affordable price,” says Seif Yashar Helmy, director of international affairs at Pharco Pharmaceuticals, which ships 20% of its exports—worth $9 million a year—to other parts of Africa and expects strong growth in the coming years thanks to a new line of World Health Organization-approved mRNA vaccine.

Egypt And Morocco Lead The Way

Egypt is by far North Africa’s largest market with a population of over 110 million, half of whom are under 30. The country is emerging from a severe fiscal crisis that almost led to bankruptcy in 2024, but is expected to post a solid 3.8% GDP growth this year, according to the IMF. While the economy relies heavily on foreign support and imports, Cairo, Africa’s largest city, has a strong industrial base across sectors including textiles, food processing, and automotive.

Pharco, Egypt’s leading pharmaceutical maker, produces 1.7 million boxes of drugs a day. During last year’s crisis, it had to scale back some production, but optimism is returning.

“We see the economy picking up, and prospects are good,” says Helmy. Pharco recently invested $350,000 in Medoc, a clinic management startup. “Egypt is underserved in healthcare, be it clinics, polyclinics, laboratories, imagery, and that opens opportunities.”

Recent reforms, including the floating of the Egyptian pound, have helped stabilize the economy and rekindled foreign investors’ interest. Many local companies are seeking new global partners, and a robust pipeline of IPOs is expected on the Egyptian Stock Exchange.

“The laws are becoming more flexible for foreigners to invest, and we see a lot of appetite for foreign direct investment [FDI] coming from Europe and the Gulf Cooperation Council,” Helmy notes.

Egypt also boasts some of Africa’s largest banks and most successful financial innovators. Fawry and MNT Halan were among the region’s first fintechs to reach $1 billion valuations. Today, Cairo is one of Africa’s top three fintech hubs, home to hundreds of startups from giants like Paymob to emerging players such as Sahl and Kilivvr.

For fintech entrepreneurs, structural challenges, from low financial literacy to currency devaluation, are creating space for innovation.

“There’s a universal problem in our region, which is a lack of foreign currency, combined with rising inflation, shooting consumer price indices, and no investment products,” says Ahmed Amer, CEO of Web3 tech provider EMURGO Labs. “People basically only have two ways of investing their money, either in gold or in real estate.” EMURGO has supported the launch of USDA, a stablecoin regulated by the US Securities and Exchange Commission that is pegged to the US dollar for trade finance and remittances.

“It’s really important that emerging economies start thinking outside of the box to develop new ways of attracting and preserving capital,” Amer adds.

Traditional banks are moving in the same direction. “We’re investing heavily in building a group-wide data infrastructure, not only in Egypt but across our African footprint,” says Islam Zekry, group CFO and COO at Commercial International Bank (Egypt), the country’s largest private bank. “One clear opportunity lies in streamlining KYC and compliance processes. By creating an integrated data warehouse and sharing verified customer intelligence across our markets, we expect to reduce the cost to serve by 20% to 30%. We aspire to be a platform that attracts capital, connects businesses, and delivers a new standard of banking experiences, all while being proudly rooted in Egypt.”

Morocco is the second pillar of North Africa’s economy. Decades of economic reforms encouraging private sector growth and infrastructure investment have turned the country into an FDI magnet. Today, Morocco is considered one of the best places in Africa to do business, with global giants including Procter & Gamble, Unilever, Siemens, and AstraZeneca setting up factories and regional headquarters in the kingdom. Despite global headwinds, the IMF expects Morocco’s GDP to grow 3.9% this year.

Tunisia Faces Headwings

Other North African countries present a different story.

Mauritania, Algeria, and Libya remain largely shut off, rent-driven economies. In Tunisia, despite years of deep economic and financial turmoil, the government still has not enacted reforms that could unlock IMF support.

Last year, the Central Bank of Tunisia had to step in to bail out the economy, and the IMF projects growth for 2025 at just 1.4%. That said, the banking sector has held up relatively well. In March, Moody’s upgraded Tunisia’s sovereign debt rating to Caa1 from Caa2, citing the central bank’s ability to maintain stable foreign exchange reserves.

“Results for 2023, 2024, and the first half of 2025 demonstrate the resilience of Tunisian banks,” argues BIAT’s Jebir. “I believe we can expect progress in Tunisia’s next reviews, which would have a positive knock-on effect for banks’ ratings. This would enable us to expand further internationally without being constrained.”

Tunisia’s banking model is still largely brick-and-mortar, but modernization efforts are underway. This year, the government passed laws restricting the use of paper checks and encouraging digital payments. Jebir sees an opportunity in the shift.

“We are developing a wide range of digital solutions for both retail and corporate clients,” he says. “At the same time, we are reshaping our branch network into advisory and expertise centers, providing added value beyond the traditional services of a bank.”

A fintech ecosystem is emerging, with startups such as mobile wallet Floucy, but international investors remain cautious.

“It’s tough to operate there,” says Amer, who has supported Tunisian startups in the past. “I mean, it’s very hard to attract FDI when your fiscal and monetary policy doesn’t provide any confidence to the investors, right?”

Looking South

As their own economies improve, North African companies are looking south for expansion, supported by their banks. Moroccan lenders now operate across the continent; Bank of Africa, Attijariwafa, and BCP Group cover more than 25 African countries, from Senegal to Ethiopia. Egyptian banks, including CIB and Banque Misr, are following trade corridors in East Africa using Kenya as a regional base.

“We’re enhancing SME lending through digital partnerships, leveraging the country’s well-developed ecosystem,” says CIB’s Zekry. “We’re also advancing digital channels to scale access and deepen client engagement, reflecting our broader model of localized innovation with regional consistency.”

Zekry also sees growth potential in climate finance. “As we expand across Africa, a significant share of our growth will come from transitional finance, particularly in agricultural and underserved communities. We’re introducing specialized services in these areas, not just as a development goal but because they make strong business sense.”

Cross-border trade, industrial strength, and financial innovation are opening new opportunities throughout North Africa, but structural issues remain. “The potential is massive, but reforms need to continue and the capacity to introduce new technologies will be critical,” Amer observes. If these elements align, North Africa could realize its aspiration to become a strategic hub connecting Europe, the Middle East, and sub-Saharan Africa.

US tariffs are hitting African exports hard. Now, governments and businesses must devise a Plan B to expand trade and grow their economies.

US President Donald Trump is not an Africa enthusiast; he has mocked Lesotho as a place “nobody has ever heard of ” and has never set foot on the continent.

In July, however, Africans were hopeful that Trump was mellowing. At a summit in Washington with the presidents of five African nations, he announced a shift from “aid to trade” in US efforts to strengthen ties with the continent.

Pivoting US-Africa relations toward trade and investment to foster self-reliance and mutual prosperity and move away from traditional aid dependency was critical, Trump said. He had already dismantled USAID, the principal US foreign aid agency, leaving a trail of negative social effects on the continent.

Many took this seeming pledge to expand trade with skepticism. And a few weeks later, Trump unveiled the Reciprocal Tariff Rate, sending shockwaves across 22 African nations suddenly slapped with duties ranging from 15% to 30%, that started on August 7.

South Africa, Algeria, and Libya were the worst hit, their tariffs set at 30%, while Tunisia got a rate of 25%. Tiny Lesotho and crisis-ridden Chad and Equatorial Guinea were not spared as their new rates hit 15%.

Bintu Zahara Sakor, a doctoral researcher at Norway’s Peace Research Institute Oslo (PRIO), notes the contraction of promising more trade with Africa and then imposing punitive tariffs that are bound to be damaging to the continent.

“Diversification could empower Africa to dictate its trade narratives.”

Zahara Sakor, PRIO

---

“This mixed messaging creates uncertainty for African businesses and investors,” she says. The endgame is stifling the very trade the US purports to promote.

The Biggest Economies In The Crosshairs

While targeting only about half of the continent’s countries, two of its biggest economies, South Africa (30%) and Nigeria (15%), are on the list. Most of the others are grappling with extreme poverty and challenges of job creation. Among them is Botswana (15%), whose economy is in a recession.

By the numbers, African exports to the US are not substantial, accounting for only 1.5% of the continent’s collective GDP. Africa’s $34 billion of exports to the US are a mere 1.2% of total US imports and a drop in the ocean when juxtaposed with Washington’s $3.2 trillion global trade volume.

But the numbers don’t tell the whole story. For the past 25 years, US-Africa trade relations were defined primarily by duty-free access under the African Growth and Opportunity Act (AGOA). With his new tariff schedule, Trump has discarded AGOA, damaging the prospects for future exports cutting across automobiles, machinery, textiles, apparel, minerals, and agricultural products, among others.

“What we are witnessing under Trump is US imperialism,” argues Patrick Bond, professor of sociology at South Africa’s University of Johannesburg. The damages the tariffs inflict on the continent will be immense, he predicts.

Case in point is South Africa. The US is its second-largest trading partner after China, and its agricultural and automobile manufacturing industries bear the brunt of the tariffs. According to data from NAAMSA, South Africa’s auto industry lobbying group, the US is the third-largest destination for the country’s auto exports. South Africa shipped approximately $1.9 billion worth of vehicles to the US market in 2024, accounting for 6.5% of total exports. Owing to tariffs, however, auto exports have plummeted by an average of 60% this year.

South Africa is warning that a staggering 100,000 jobs are at risk from the new duties, devastating for a country with a 33% unemployment rate and where crime is among the highest globally. The only bright spot is the exemption of platinum, gold, and other minerals, which will continue to be zero-rated.

The situation is worse in Lesotho, which ranks among the poorest nations in the world with youth joblessness at 48%. The government has declared a “state of disaster,” reckoning the US tariffs will devastate the textile and apparels industry, which employs 40,000 people.

Lesotho is one of Africa’s largest garment exporters to the US, thanks to the AGOA. In 2024, it exported goods worth a cumulative $237.2 million to the US market, 75% of that garment exports. The industry accounts for roughly 20% of GDP.

Devising A Plan B

Trump’s tariffs call for “swift policy responses” to safeguard the continent’s long-term economic prospects, Sakor urges. The AGOA was set to expire on September 30; while Congress holds the power to renew it, the current administration is not concealing its aversion to the pact. With the new tariffs, the era of regional duty-free market access under the AGOA is over. In its place, Washington wants a shift toward bilateral deals that extract concessions like market access for US goods or alignment on geopolitical issues.

“US-Africa trade relations may become more fragmented and conditional, focusing on select ‘friendly’ nations with lower tariffs or new free trade agreements [FTAs],” Sakor says. Countries like Morocco, which has a binding FTA with the US, and Kenya, which is currently negotiating one, were among those spared the backlash.

With the US playing hard ball, Africa is at a point where it must devise a Plan B for future trade policy. One starting point could be deepening intra-Africa trade by accelerating implementation of the African Continental Free Trade Area (AfCFTA).

On paper, AfCFTA has the potential to boost intracontinental trade to 53% from around 18% currently, growing the manufacturing sector by $1 trillion, generating income worth $470 billion, and creating a whopping 14 million jobs by 2035, according to the African Export-Import Bank (Afreximbank).

Six years after the agreement was signed, however, the continent has yet to record any tangible benefits. Last year, trade was valued at $208 billion, a 7.7% increase from 2024, according to Afreximbank. Compounding the difficulties are disintegrating regional economic community blocs and rising non-tariff barriers.

“AfCFTA is encouraging in theory, but has not yet delivered mutually advantageous market opportunities,” observes Bond. For this reason, Africa could be forced onto a different course of action: strengthening trade ties with China while exploring opportunities in other global markets.

Over the past 25 years, China has risen to become Africa’s largest trading partner. Last year, trade with the people’s republic was valued at $294.3 billion, a staggering increase from $13.9 billion in 2000, according to Chinese government data. The amount dwarfs US-Africa twoway trade, which was valued at $104.9 billion in 2024.

Chinese engagement has been a mixed blessing. Beijing has flooded Africa with cheap goods, rendering nascent industries uncompetitive. This, combined with the lessons of Washington’s volatile behavior, suggests that the continent needs to cultivate balanced and reciprocal agreements with multiple trading partners.

“Diversification could empower Africa to dictate its trade narrative,” Sakor says, arguing that this is critical if the continent is to foster sustainable growth outside of unilateral preferences like AGOA. The European Union, Russia, India, Japan, South Korea, and the Middle East are some of the markets that offer Africa opportunities for deeper trade ties, Sakor notes.

Africa must decide whether to accept the higher US tariffs as the cost of doing business, build its ties further with China and Russia, or take a more diverse approach. The latter two, obviously, would only alienate the continent further from Washington.

Major Latin American banks are racing toward 100% digital models. Despite the rise of fintechs, traditional banks are determined not to be left behind.

Digital transformation is no longer a buzzword in Latin America; it is an existential imperative.

Digital natives like Brazilian neobank Nubank, Argentine fintech Ualá, and regional payments platform Mercado Pago are scaling into super-app ecosystems while giants like Santander and BBVA push forward with their own digital units. The next several years may determine whether traditional banks can reinvent themselves fast enough to remain competitive, or whether the fintech wave will carry Latin America into a new era of finance.

The number of fintechs operating in the region surged from 703 in 2017 to over 3,000 in 2023: a staggering 400% increase, according to a joint study by the Inter-American Development Bank (IDB) and Finnovista. The explosion of financial startups has upended traditional banking, and is pressuring established institutions to reinvent themselves or risk obsolescence.

Data from Accenture underscores the challenge: Digital-only banking players have grown revenue by 76% compared to 44% for traditional banks replicating legacy models online. This suggests that simply bolting digital interfaces onto outdated systems yields diminishing returns. Instead, agility and modularity are the new competitive currency.

The rise of digital-only players, the acceleration of instant payment systems like Brazil’s PIX, and the rapid adoption of super-app models are converging to redraw the competitive map. Traditional banks are racing to shed legacy systems and cultural inertia while fintechs expand aggressively into core banking territory.

Constraining the race toward 100% digital banking is a lack of up-to-date basic infrastructure, warns Giorgio Trettenero Castro, secretary general of the Federación Latinoamericana de Bancos (FELABAN).

“Financial services demand that the general public have access to quality, competitively priced internet,” he says. “That is not entirely the case in Latin America, where rural areas face a deeper divide; only 39% of rural populations have internet access. Moreover, Latin America has just 4.8% of the world’s data centers, with Brazil in the lead. This shortage hampers competitiveness and raises costs.”

These structural weaknesses coexist with distinct opportunities. About 57% of fintechs target the region’s unbanked population, according to the IDB and Finnovista report. Currently, around 20% of Latin American adults are not financially included, according to a 2024 study by Mastercard and Payments and Commerce Market Intelligence: a substantial population waiting to be tapped.

Newcomers Reshape The Financial Arena

Traditional banks and fintechs increasingly resemble each other when it comes to their processes.

“In the past, a customer had to bring a pile of documents and meet with a bank manager to open an account and wait several days. Now, everything can be done in minutes on a smartphone: an innovation pioneered by Nubank 12 years ago,” observes José Leoni, managing director at Moneymind Partners, a São Paulo-based financing advisory firm. “Back in the 1980s, the main customer retention tool was automatic debit, clearly a tech innovation for the time. Today, every bank has similar offerings. What makes a bank attractive now are costs, a unified platform for all products, and customer experience.”

Banco do Brasil has put significant effort into customer experience, but despite a technology investment that reached $554 million last year, it still maintains legacy systems.

“Now we have 30% of our applications in cloud computing, so we operate on a hybrid system that has worked well so far,” says Bárbara Lopes, head of Customer Experience for digital and physical channels Banco do Brasil.

While part of its infrastructure remains on-premises, Banco do Brasil considers itself 100% digital, as 94% of clients using its app carry out their transactions through digital channels. Of its 86 million total clients, 31 million are active digital users, a number that continues to grow yearly.

“Our goal is to provide a good, customized experience with AI to serve all our different audiences,” Lopes says: “young people, vulnerable populations, agribusiness workers, and entrepreneurs.” Competition is massive, she notes, and personalizing customer experience is one of the most important strategies for retaining clients.

Banco de Inversiones de Chile (BCI) has adopted a similar strategy, stressing investment in technology as critical to keeping up with trends and delivering a better customer experience.

“Innovation and data management are fundamental pillars of BCI’s growth strategy,” says Claudia Ramos, manager of Innovation and Data Analytics. “That’s why, in recent years, we invested $100 million in our app, which delivered benefits representing nearly 20% of our EBITDA. Today, all our customers use digital channels.”

BCI’s road to digitalization began in 2015; two years later, it launched Machbank, a fully digital neobank offering investment solutions to improve customer experience and broaden inclusion. Machbank now has 4.2 million clients, with a youthful, userfriendly profile, out of a total of almost 6 million at BCI. The bank continues to offer a strong digital value proposition across its 183-branch network, where all customers now use digital solutions.

The latest trends point to interactions driven by massive use of technology, Ramos argues: “Simplicity, transparency, and more objective experiences are the best proposals for financial inclusion. Our next step is to further leverage AI to enhance user experience.”

Challenges Ahead

For incumbents, the challenge is often less technological than cultural; resistance within teams and reluctance to change entrenched routines often slow progress. At BTG Pactual, Marcelo Flora, managing partner and head of Digital Platforms, says he struggled for years to convince his colleagues to embrace digital transformation.

Following the example of Goldman Sachs, BTG Pactual built its reputation on asset management, wealth management, and investment banking, generating comfortable profits of R$4 billion per year ($736 million) in 2014.

“We were victims of our own success,” says Flora: why change a model that was working so well?

Once fintechs emerged and incumbents started to lag, however, BTG Pactual prepared itself for the next wave. The results were striking; profits quadrupled in 10 years, from $736 million to $2.9 billion.

“Now we have the speed of a fintech and the credibility of an incumbent,” Flora says.

Most banks established before the rise of digital players have faced similar hurdles.

“The main challenge is usually not technological, but cultural and organizational,” agrees Andrés Fontão, CEO of Finnosummit, organizer of the annual Latin American fintech conference. “Many institutions carry inherited structures and processes, and if senior management is not fully aligned with the digitalization mission or able to transmit that vision downward, change stalls.”

Digital banking lowers the barriers that traditional models raise: fewer documents, no need to visit a branch, simpler interfaces. This opens doors for previously excluded populations.

“In Mexico, only about 55% of adults had an account in 2023,” notes Fontão. “Other reports indicate just 49% are banked, leaving about 66 million people without access. But between 2017 and 2021, Latin America saw the largest increase in financial inclusion globally—19%—thanks to innovations such as digital payments, online commerce, and digital subsidy distribution.”

That does not mean branch banking is going the way of the dodo.

“Although neobanks are cheaper to operate because they don’t maintain physical branches and promote digital inclusion, in Latin America, the belief in bank branches remains strong,” says Francisco Orozco, professor at the Center for Financial Access, Inclusion and Research of the Monterrey Institute of Technology and Higher Education. “Reputation is essential, and even though young people are digital natives, there is a kind of inherited financial habit. Most people still want to use cash and visit branches.”

Leveraging this predilection, Nu Mexico signed an agreement with the OXXO convenience store chain in January to expand its cash deposit and withdrawal network.

“This is a way to promote digital inclusion,” says Orozco.

Beyond Branches And Borders

Latin America’s transformation could point the way for other developing regions. It combines massive unmet demand, agile fintech innovation, and regulatory experimentation. If incumbents can overcome cultural inertia and infrastructure gaps, they may leapfrog into a model of fully digital, inclusive, and interoperable banking.