Capitec Bank has been ranked as the top bank in South Africa in the latest Lafferty global rankings – and has again been named as one of the leading banks globally.
The Lafferty Banking 500 study is a survey of 500 banks worldwide (expanded from 100 surveyed in 2016 and 2017), in which banks are given star-ratings out of five.
The group uses a combination of financial and non-financial disclosures in banking groups’ latest annual reports to determine the quality of the organisations and their respective business models.
It stressed that it does not only look at financials and ratios, but also factors in future-facing aspects, such as strategy, as well as culture, customer satisfaction, executing brand promises and other criteria.
Institutions from 72 markets across all global regions are included in the survey, ranging from large global banks to small regional institutions.
A star rating is applied as part of the benchmarking of banks, with five stars for the best performers, and one star at the other extreme. Roughly one-third of the banks in the study achieved a four-star quality ratings, while two-thirds were rated three-star or lower.
Capitec was one of only eight banks worldwide to achieve a five-star “top quality” rating – while the average star rating for banks in South Africa was 3.7.
By comparison, UK banks scored an average of 3.5, Canada 2.9, and Germany and the US scored 2.8.
The banks are assessed across 19 metrics, which include things like loans to deposits ratios, profits and assets, as well as other indicators like strategy, culture and end leadership.
According to Lafferty, the survey found that ‘focus’ is the key to success in banking, with the best performing banks focusing on consumer and SME/business banking.
The group found that standalone investment banks performed poorly, and that universal banks, combining commercial banking and investment, also performed badly – “not least because of weaknesses in both strategy and culture,” it said.
Seven South African banks were ranked in the global top 500.
FinBond, First Rand and Absa ranked within the top 100, with a 4-star rating – while Nedbank, Standard Bank and Investec were given 3-star ratings.
While Capitec maintained its leading position in South Africa, it’s global rank dropped from number one in 2017, to third in 2018. FirstRand and Absa were also the only of the ‘big four’ banks able to hold onto a 4-star rating, with both Nedbank and Standard Bank dropping to a 3-star rating compared to last year.
This is how the banks in South Africa ranked:
Lafferty noted that the study is not a strict ranking report, but rather serves as a benchmarking of the various banks, with a detailed database scoring the groups on each of the 19 indicators.
“The Lafferty ranking is an encouraging validation of the work done by our team to build Capitec’s brand, culture and digital touch points. Our belief is that banking should be simple, affordable and transparent and as we strive to be the best retail bank in the world, this recognition is a strong indication we’re heading in the right direction,” said Capitec CEO Gerrie Fourie.