Is Capitec now the biggest bank in South Africa?

FirstRand has published its full year financial results for the period ended June 2018, reporting that the group’s retail banking segment – FNB – saw a 4% growth in customers to 8.15 million.

While the full scope of a bank’s size is not contained in its customer numbers – various metrics such as assets, revenue and a host of other financial information give a better idea – it is one important measure that can be used to determine who’s the biggest, and who’s growing.

Looking at the latest financial information across all the banks, it would appear that FNB is now placed above Standard Bank and Nedbank in terms of customers in South Africa.

In its investor presentation for its interim results to June 2018, Standard Bank reported that its active customer base in South Africa totalled 8.1 million. The bank has historically been coy around its customer base, but reports on its account numbers.

In its full year results, it reported having 8.22 million accounts, including current, active, transaction and savings accounts.

Nedbank, meanwhile, reported customer numbers at 7.5 million for the same period (FY2017), jumping to 7.65 million customers by June 2018.

Absa did not include any customer numbers in its latest interim report (June 2018) and has not done so since its interim results for 2017.

When asked for an update on its figures, that bank said that it no longer finds it necessary to publish their customer numbers.

“Customer numbers on their own are not a reliable measure of success or comparison between one bank and another,” a spokesperson for the group said.

The group said that a comparison of aggregate customer numbers between different banks is “not appropriate” due to differences in customer redundancy policies, which vary between different banks.

However, the last reported figures showed a steady decline in Absa’s numbers, from 9.4 million South African customers in FY 2015, to 8.9 million in interim 2016, 8.75 million in FY 2016, before hitting 8.65 million in interim 2017. The bank has since given no indication of any movement in its client base.

With no data from Absa, this effectively places Capitec at the top of the pile, with the group’s full year 2018 figures (to February 2018) showing its client base at 9.9 million – with the bank boasting that it is currently seeing on average 100,000 new customers joining its ranks every month.

The group said it is currently in closed period ahead of its interim results, but told BusinessTech it is “well over” the 10 million customer mark, which it hit in April.

Using the 100,000 customers a month statement, it would put its numbers in the region of 10.2 million at June 2018.

Bank June 2017 December 2017 June 2018 Year on Year Change
Capitec 9.0 million* 9.87 million* 10.2 million +13.0%
FNB 7.84 million 8.15 million +4.0%
Standard Bank 8.5 million** 8.22 million** 8.12 million -4.7%
Nedbank 7.8 million 7.5 million 7.65 million -1.9%
Absa 8.65 million

* March 2017/18 ** Active, Current, Transactional and Savings accounts

Without any data from Absa, there’s no way to tell where it falls in the picture, but the bank has made it quite clear in its latest interim report that it is making it a priority to return to being the leader in South African banking.

To this end, the group said that it would recalibrated its operating model to improve its growth and agility, with investments being aimed at improving customer experience, and strengthening its physical and cyber channels.

New competition

While the now-‘Big Five’ banks tend to dominate the discussion when it comes to banking numbers in South Africa, they will soon be joined by several new entrants in the market, one of which is expecting to compete directly with them.

Along with digital players like TymeDigital and Bank Zero, Discovery Bank is expected to be one of the biggest new players in the banking space, with an anticipated launch before the end of 2018.

Discovery has the full service banks in its sights, but Capitec will also be in the crosshairs as Old Mutual and African Bank also come after its target market with their own offerings.

Bank Zero and TymeDigital, however, will aim to disrupt the market with a digital-only approach.

Read: Discovery inches closer to bank opening

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Is Capitec now the biggest bank in South Africa?