When banking in South Africa, customers are typically drawn to what is known as the “big four” banks: Standard Bank, Absa, Nedbank and FNB.
However, with its latest financial results, Capitec shows that even though it’s not a full-service bank, it can play with the big kids, having added more than one million new clients to end up just 100,000 customers shy of Nedbank’s base.
For the full year ended 29 February 2016, Capitec reported a 26% jump in headline earnings, to R3.2 billion.
Net income increased 19% to R9.06 billion, while operating expenses climbed by 14% to R4.6 billion, led primarily by staff costs and branch expansion.
The highlight of Capitec’s results, however, is the significant boost in clients. The bank added 1.025 million new clients to a total active base of 7.3 million.
According to Capitec CEO Gerrie Fourie, the growth in clients is because of the bank’s focus on its customers, pricing transparency and the introduction of newer, easier-to-use technology to do banking.
The CEO said that the usage of Capitec Bank’s cell phone banking offer was “exceptional” and that over a million clients had registered as users since it launched in 2014.
“This is the most convenient, low cost and safest way for clients to bank and we have purposefully decided not to increase fees on these services over the past two years.”
Other South African banks
South Africa’s biggest bank by clients its Standard Bank – a position it has held for a number of years, having usurped Absa. The bank does not release a specific breakdown of its clients, however the number stood at 11.1 million South African customers at December 2014.
Absa, trading as Barclays Africa, has seen only a small increase of around 200,000 South African customers in the past financial year, with 9.4 million clients at December 2015.
However, Absa remains the second biggest bank, as a ‘write down’ of banking customers in 2015 ( in which accounts were reclassified as dormant) saw FNB drop from 7.3 million customers to 7.1 million.
According to Ryan Prozesky, CEO of Value Banking Solutions at FNB, as at December 2015 (FNB’s interim period), the bank had 7.2 million customers.
The bank said that it only includes accounts that are recently active (customer initiated transactions), excluding automated transactions such as interest payments.
Here is how South Africa’s banks stack up in terms of customers:
South African banking customers (December 2015)
|Bank||FY 2014/15 customers||FY 2015/16 customers||Change|
|Standard Bank||11.1 million||11.6 million||+4.5%|
|Absa Bank||9.2 million||9.4 million||+2.2%|
|Nedbank||7.1 million||7.4 million||+4.2%|
|Capitec||6.2 million||7.3 million||+17.7%|
|FNB||7.3 million||7.2 million*||-1.4%|
* Interim, December 2015