Banque pour le Commerce et l’Industrie Mer Rouge (BCIMR), Djibouti’s Biggest Bank, has announced plans to expand into Ethiopia, joining Kenya Commercial Bank (KCB) Group and Equity Bank in targeting Africa’s second-most populous country after recent reforms lifted a long-standing ban on foreign lenders. The announcement highlights the growing race among East African banks to establish a foothold in a market of more than 135 million people that has only just opened its financial sector.
On September 11, 2025, BCIMR executives led by CEO Sébastien Nahom and Deputy CEO Abdallah Ibrahim Abdallah met Kebede Abera, Deputy Head of Mission at Ethiopia’s embassy in Djibouti. The talks focused on entry strategies following the passage of Ethiopia’s Banking Business Proclamation No. 1360/2025, which permits foreign lenders to set up subsidiaries, open branches, or buy equity stakes of up to 49% in local institutions. Nahom described the reforms, together with Ethiopia’s macroeconomic adjustments such as forex liberalisation and inflation targeting, as creating a “favourable investment climate.”
Founded in 1954 as a BNP Paribas offshoot and later acquired by France’s BRED Banque Populaire, which holds 51%, Banque pour le Commerce et l’Industrie Mer Rouge commands 45% of Djibouti’s banking market. The Djiboutian government owns 33%, while a Yemeni partner controls 16%. The bank offers a full suite of services including retail, corporate, SME, and trade finance. With 95% of Djibouti’s economy tied to Ethiopian trade through the Addis Ababa–Djibouti railway and ports, BCIMR has long partnered with Ethiopian lenders such as Bank of Abyssinia and Wegagen Bank. It has also operated a representative office in Addis Ababa since 2015.
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The bank’s interest follows moves by Kenyan lenders. In August 2025, Kenya Commercial Bank (KCB) Group announced plans to acquire a stake in an Ethiopian bank by February 2027. KCB Bank noted that it will build on the group’s presence through its Addis Ababa representative office, opened in 2015, and ongoing talks with regulators for either a universal banking licence or equity ownership of up to 40%. CEO Paul Russo has confirmed that the lender prefers acquisition to greenfield expansion to avoid challenges in deposit mobilisation. The transaction is set to be funded partly through the sale of KCB’s National Bank of Kenya subsidiary to Nigeria’s Access Bank for USD 100 million.
KCB’s expansion into Ethiopia comes on the back of an aggressive regional growth strategy that has already seen it acquire BPR Bank in Rwanda, where it is now its second-largest subsidiary, and an 85% stake in Trust Merchant Bank in the Democratic Republic of Congo. The bank also operates in Tanzania, Uganda, and South Sudan, consolidating its position as one of East Africa’s most diversified financial institutions.
Equity Bank has also advanced discussions on its entry into the Ethiopian market. This week, Equity Bank CEO Dr. James Mwangi met Ethiopian Investment Commission (EIC) officials in Addis Ababa. EIC Commissioner Dr. Zeleke Temesgen welcomed the move, noting Ethiopia’s attractiveness to regional lenders. Mwangi stated that Equity Bank entry into Ethiopia has been under consideration for years but is now viable following the liberalisation, given the country’s size, growth potential, and the low level of banking penetration.
Ethiopia’s financial reforms have ended more than five decades of protectionism. For much of that time, banking was restricted to domestic players following the nationalisation of industries in the 1970s. The Commercial Bank of Ethiopia, a state-owned lender, continues to dominate with more than 60% of total assets and deposits. Private banks such as Awash and Dashen compete in a relatively low-competition environment, with overall financial penetration standing at only 45%. The new Ethiopian law caps foreign ownership at 49%, with strategic investors limited to 40% and non-strategic ones to between 7% and 10%, and requires foreign subsidiaries to have at least ETB 5 billion (about USD 36.7 million) in minimum capital.
The reforms, passed in December 2024 and ratified in 2025, are part of Prime Minister Abiy Ahmed’s wider economic liberalisation programme, supported by a USD 3.4 billion IMF Extended Credit Facility. They aim to inject competition, attract foreign direct investment, and improve efficiency in a sector burdened by high non-performing loans, weak infrastructure, and limited innovation. The National Bank of Ethiopia has been granted expanded supervisory powers, while foreign banks must comply with governance rules mandating one-third Ethiopian board representation.
Banque pour le Commerce et l’Industrie Mer Roug entry into Ethiopia is intended to complement its expansion with digital finance initiatives, including partnerships with Djibouti Telecom’s D-Money platform, aligning with Ethiopia’s growing appetite for mobile and electronic payments. BCIMR’s management said they intend to engage Ethiopian regulators, private sector players, and cross-border businesses to accelerate the entry process, with support already pledged by Ethiopia’s embassy in Djibouti.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.