The Banker has published its annual ranking of the world’s 1,000 biggest banks, as measured by their level of tier 1 capital – with five South African banks making the list in 2020.
This is down from seven banks in 2019, with Capitec and African Bank dropping from the ranking.
The group noted that despite South Africa entering a recession in the fourth quarter of 2019 – its second in two years – and severe electricity blackouts causing widespread disruption across all sectors of the economy, the country’s banks still managed to grow their tier 1 capital.
However, the outlook for 2020 remains bleak, it said.
“Coronavirus containment measures (are) set to compound structural weakness in the economy. The International Monetary Fund forecasts gross domestic product will contract by 5.8% in 2020, before rebounding by 4% the following year.”
Standard Bank has maintained its position as the country’s biggest bank, recording $10.54 billion in tier 1 capital in 2020.
This is followed by FirstRand, which is closing the gap with the country’s leader, The Banker noted.
“While Standard Bank’s earnings for 2019 were constrained by the difficult operating conditions in South Africa, the bank retained its prime position nationally, with its Tier 1 capital position improving by 8.16% to $10.5 billion and its total asset base rising by 9.73%,” the group said.
“However, the bank’s Top 1000 overall position fell to 152 from 149 in the 2019 ranking.”
Standard Bank’s pre-tax profits continue to come in ahead of its rivals, though a significant loss by ICBC Standard – part of the Chinese banking group Industrial and Commercial Bank of China in which it co-invests – saw overall pre-tax profits rise by just 1.4% for the year.
FirstRand, meanwhile, comes second for performance, and first overall for soundness. It also scored highly for return on risk, profitability and operational efficiency, The Banker said.
In the overall rankings for South Africa, Absa follows in third, with Nedbank and Investec also maintaining their fourth and fifth places, respectively.
The biggest banks in South Africa
|#||Bank||2019 Tier 1 Capital $m||2020 Tier 1 Capital $m||Change|
|152||Standard Bank||9 752||10 547||+8.2%|
|169||FirstRand||8 231||9 163||+11.3%|
|190||Absa||6 848||7 773||+13.5%|
|232||Nedbank||5 109||5 713||+11.8%|
|463||Investec||2 801||2 167||-22.6%|