The biggest banks in South Africa in 2022

The Banker has published its annual ranking of the 1,000 biggest banks in the world, as measured by their level of tier 1 capital – with seven South African institutions making the list in 2022.

South Africa’s banking sector is again led by Standard Bank, which retains its position as the biggest bank in the country when measuring capital. This is followed by FirstRand, which, along with retaining its number two spot, was also the biggest gainer over the past 12 months.

“FirstRand was the country’s big gainer in the main ranking for 2022, rising 30 places on the back of a 35.1% increase in Tier 1 capital, benefiting from the fluctuation of the appreciation of the rand during its reporting period.” The Banker said.

“While the economic environment in South Africa remains extremely challenging, the country’s lenders still enjoyed a partial recovery in 2021; all seven banks in this year’s Top 1,000 saw an increase in their Tier 1 capital bases, with five advancing in the ranking.”

This year also marks a return to the ranking for African Bank, which did not make the top 1,000 in 2021. The bank re-enters in 961st position, with $629 billion in tier 1 capital.

According to The Banker, while Investec is ranked fifth in South Africa by capital, and dropped one place on the international rankings, the bank has retained its position as the country’s best-performing lender thanks to high scores for operational efficiency, asset quality and liquidity.

“The bank’s cost-to-income ratio improved significantly from 59.61% to 51.83% during the year, while non-performing loans dropped from 2.6% to 1.9%,” The Banker said.

Absa and Nedbank registered the largest gains in pre-tax profit of the big five in 2021, with rises of 138% and 140%, respectively.

The biggest banks in South Africa

Global performance

In the 2022 study, total Tier 1 capital across all banks in the ranking reached $10.38 trillion, an increase of 4.7% from 2021.

The minimum Tier 1 capital needed to enter the 2022 ranking reached an all-time high of $556 million.

“Profits saw a healthy rebound, with aggregate pre-tax figures reaching a record-breaking $1.44trillion. This is a 53.7% year-on-year increase, compared to a decrease of 19.2% in the 2021 ranking. However, much of this boost can be attributed to a reduction or reversal in last year’s credit impairment charges for expected loan losses that didn’t materialise,” The Banker said.

China continues to outpace the US  in terms of both Tier 1 capital and asset growth, underpinned by a strong domestic economy which grew at 8.1% in 2021. China expanded its aggregate Tier 1 capital by 14.4% (versus 4.7% for the US) and total assets by 10.9% (versus 8.8% for the US).

China has more than double the Tier 1 capital ($3.38 trillion) and almost double the assets ($41.53 trillion) compared to the US, with 186 banks. Overall, it holds 32.5% of the world’s Tier 1 capital and 26.9% of its assets.

The Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agricultural Bank of China, and Bank of China held onto the top four spots in the ranking for the fifth year in a row. With Bank of Communications edging into 10th position, Chinese banks now make up half of the top 10 for the first time.

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