Capitec is the biggest bank in the country by customer numbers, but Standard Bank has the biggest income base.
Standard Bank ranks top by core capital, while FNB has some of the happiest customers, and Absa has a wide reach.
Looking at the various financial and operational metrics published by the country’s biggest banks, almost all of them lead in some metric.
BusinessTech looked at the most recent annual financial reports (from 2018/19) and compared the banks on 12 key metrics – from financial performance, to network and reach.
The data below covers both group and South African operations – for example, group data was used for employees, and finances, while South African data was taken for customer numbers. FNB is represented by FirstRand Group, but FNB branches and ATMs were used for the figures. Share prices, market cap and P/E rations were taken from Bloomberg data.
The data covers
- FirstRand – FY 2019
- Capitec – FY 2019
- Absa – FY 2018
- Nedbank – FY 2018
- Standard Bank FY 2018
Market capitalisation and P/E ratio
Two years ago, Capitec had the smallest market capitalisation across the big five retail banks – today, the bank is the third largest, pushing past both Nedbank and Absa on the Johannesburg Stock Exchange.
FirstRand and Standard Bank were in a battle for the top spot by this metric, but the former has comfortably surpassed its competitor.
When it comes to share price, Capitec, again shines, having hit the R1,000 per share mark in 2018. Capitec also has the highest price over earnings (P/E) ratio, making it quite expensive.
The P/E ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings.
The ‘cheapest’ stock among the banks is now Nedbank, with a P/E of just over eight.
Finances
Among the South African banks, Standard Bank is the top earning institution, bringing in total income of close to R100 million. However, while the bank has maintained this leading position with relative ease over the years, FirstRand has caught up. (Income reflects both the interest and non-interest income for the respective banks.)
When it comes to headline earnings, FirstRand is already the leader, reporting earnings of R27.89 billion for the 2019 financial year. Standard Bank achieved slightly less – R27.87 billion – in its 2018 financial year.
Headline earnings are a measurement of a company’s earnings based solely on operational and capital investment activities. It excludes income that may relate to staff reductions, sales of assets, or accounting write-downs.
When it comes to headline earnings per share, Capitec leads.
Core capital
The Banker’s top 1000 banks report is based on a measure of a bank’s Tier 1 Capital – known as core capital, which consists of shareholders’ equity and retained earnings.
Standard Bank retains the top spot in the 2019 rankings with $9.8 billion. FirstRand retained its second position in the Africa table (and its 173rd position in the global rankings) despite a 2.3% drop in Tier 1 capital during the review period.
Absa and Nedbank retained their respective third and fourth positions in the Africa rankings, despite both experiencing double-digit falls in their Tier 1 capital positions over the period.
Absa fell 14 places to 184th in 2019’s global ranking, with Nedbank down 23 places to 240th. Capitec ranked 588th overall, and showed some growth in its Tier 1 Capital over the past year, recording a 1.7% improvement.
Reach and network
With news of the legacy banks scaling down their bricks and mortar networks, it’s no surprise to see a reduction in overall branch numbers across the banks. However, Capitec has increased its reach to include 840 branches and 5,011 ATMs.
Standard Bank still has the biggest branch network and the biggest ATM network. Absa says it has “over 1,000 branches” and “close to 8,000” ATMs, making it a strong second place.
Standard Bank also has the highest employee count, recording over 53,000 workers across the group.
Customers
Tracking customer numbers at the big South African banks has become more challenging over the years, with actual figures not being as forthcoming as before.
Banks like Capitec, which continues to show strong growth, will happily point out the hundreds of thousands of new customers being signed on each month, while banks that have lost ground over the years are less likely to report their customer numbers.
While BusinessTech included the latest customer numbers available in the table below, the key metric is satisfaction levels.
The latest South African Consumer Satisfaction Index for the country’s retail banks showed that Capitec and FNB customers are the happiest with their services, while Absa and Standard Bank lag behind.
