The latest All Media and Products Survey (AMPS) data on the South African banking sector shows that Absa retained its position as SA’s largest bank with 32.9% of the market, followed by FNB (25.2%) and Standard Bank (23.9%).
However, a big surprise in the data was the revelation that Capitec, with 10.8% of the market share, had in fact overtaken Nedbank, which slipped to 10.7%, according to the data.
According to the AMPS figures, the data an increase in Capitec’s market share from 7.9% to 10.8% between January and December 2012 – reflecting a 43% year-on-year increase for the bank among the main bank population.
Finweek editor Marc Ashton, however, disputed the claim, saying that, while Capitec’s growth is a great success story for the bank, the AMPS data isn’t quite accurate.
Ashton pointed to retail banking client numbers to emphasise his point.
When looking at the current retail banking enviroment, numbers issued by the respective banks in their financial and media reports show that the banking landscape in the country is different to the AMPS data.
|Bank||SA retail customers
|Standard Bank||10.4 million|
|Absa Bank||10.3 million|
Other points raised by Ahston to dispute the claim relate to Capitec vs Nedbank revenue (R1.3 billion per year from transaction fees versus Nedbank Retail’s non-interest revenue of R7.9 billion), and financial lending (Capitec’s R27.9 billion versus Nedbank’s R187 billion).
“Capitec is a fantastic success story and one that has shaken up the South African banking industry quite significantly. However, just to be clear, it is nowhere near South Africa’s fourth largest retail banking operation,” Ashton said.
Adrian Cloete, an equity analyst at Cadiz Asset Management agrees with Ashton. “In terms of assets, advances, deposits and NIR, Nedbank is significantly larger than Capitec.”
AMPS was only referring to the number of retail clients, the analyst said.
“Remember, Capitec and the big four banks operate in different market segments and also offer more products (home loans, vehicle loans, etc).”
“Also, Capitec has a lower pricing structure on banking charges compared to the average product of the big retail bank and this will also effect the level of NIR,” Cloete said.
Nedbank responds to the AMPS survey
“Nedbank acknowledges the findings of the latest AMPS survey, which focused on “main bank” population, as an indicator of market share growth for 2012. During the period under review Nedbank grew its retail client base by more than 650,000 bringing its base to 6.1 million at a Group level as at 31 December 2012,” said Anton de Wet, managing executive of Client Engagement at Nedbank.
“This growth is on the back of more than two million new accounts being sold to new and existing clients during 2012, equating to almost 40% of our clients with two or more products. We are determined to grow our client franchise and are mindful of the changing credit environment, taking into account the financial pressure experienced by South African consumers. We continue to drive our focus on being a bank for all in South Africa while at the same time growing a sustainable long term business.”
In March, Capitec underlined growth in its active clients to 4.7 million for the year ended February 2013, up 26% with 971,000 new clients since the prior year’s reporting period.