Banking

Capitec ranked as South Africa’s best-performing bank

Staff Writer

 ·19 Oct 2020

The Banker has launched its inaugural performance rankings for the top 25 banks in Africa, listing Capitec as the country’s best-performing bank.

The rankings look at the performance of a bank’s Tier 1 capital, calculated using eight key performance metrics – including growth, profitability, operational efficiency, asset quality, return on risk, liquidity, soundness and leverage.

Capitec and Investec are the two local banks to shine through, each placing within the top 10 on the continent in six and four of indicators, respectively – with the former making the overall top 10 ranking, placing tenth.

According to The Banker, the absence of South Africa’s big banks in the rankings can be explained by the fallout of the Covid-19 pandemic, which has sent markets into decline, and many economies into recession.

The upper reaches of the rankings are now dominated by Egyptian banks, as the north African nation has managed to avoid recession – bucking the global trend.

“The incredible growth trajectory of Egyptian lenders continued unabated in 2019, with Commercial International Bank (CIB) joining National Bank of Egypt and Banque Misr in the top 10,” The Banker said.

“The International Monetary Fund forecasts that the country’s economy will continue to grow (albeit at a much slower rate) in 2020, making it the only one of the continent’s top five economies not to slip into recession as a result of the Covid-19 pandemic.”

Of the 15 Egyptian lenders in The Banker’s Top 100 African Banks ranking for 2020, 12 improved their positions compared with last year, while all but one of the 15 reported double-digit growth in pre-tax profits for 2019, it said.

Nigeria is the next best represented country in terms of performance, with two of the top 10 banks.

Top 10 Overall in Africa

1. Commercial International Bank (Egypt)
2. Guaranty Trust Bank (Nigeria)
3. Faisal Islamic Bank of Egypt (Egypt)
4. Banque du Caire (Egypt)
5. Zeneth Bank (Nigeria)
6. African Export Import Bank (Egypt)
7. Equity Bank (Kenya)
8. National Bank of Egypt (Egypt)
9. Mauritius Commercial Bank Group (Mauritius)
10. Capitec Bank (South Africa)

Capitec was also the only South African bank ranked in the growth (seventh), profitability (third) and operational efficiency (ninth) lists, while placing third in the return on risk rank, ninth for soundness, and tenth for leverage.

Investec and Standard Bank are the only other local banks to feature, with Investec ranking second on the asset quality and profitability lists, fifth on the return on risk rank, and ninth in terms of leverage.

Investec recorded the best score of any South African bank in the performance rankings, and ranked 15th overall.

Standard Bank ranked sixth overall in the asset quality measure.

Tier 1 capital

Measuring only the quantum of Tier 1 Capital, 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.

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, while Nedbank and Investec also maintained fourth and fifth places, respectively.

The biggest banks in South Africa

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