What you would have if you invested R1,000 in Capitec, Standard Bank, Absa, FirstRand and Nedbank 20 years ago

South Africa’s five biggest banks have seen a mixed performance in their share prices over the last twenty years, with Capitec being the clear winner.

Capitec Bank was established in 2001 and has grown from 55 branches and 25,000 clients to South Africa’s largest bank, with over 23 million clients.

The group’s share price has mirrored this massive growth, increasing by over 34,000% since 2004.

This means that R1,000 invested in the company twenty years ago would be worth R341 819.83 today – far more than any other bank has returned.

Capitec’s share price has continued to rise in recent months, with headline earnings jumping by 36% to R6.4 billion in the six months ended 31 August 2024.

FirstRand

In second place is FNB and RMB owner FirstRand.

The group’s share price has grown 789.99% over the last twenty years, meaning that R1,000 in 2004 would now be worth just under R8,900.

However, the group has faced issues recently, including raising a R3.0 billion accounting provision for a UK motor commission review, which impacted its results for the year ended 30 June 2024.

Moreover, due to the worse-than-expected interest rate cycle, where the repo rate hit a 15-year high of 8.25%, FNB’s retail segment is trending above its Through-The-Cycle (TTC) range when it comes to credit losses.

The group’s headline earnings only grew 4% to 679 cents per share, below the 5.1% figure recorded in June.

Standard Bank

South Africa’s biggest bank by assets, Standard Bank, came in third place when looking at share price performance, growing 389.77% over the last twenty years.

This means that R1,000 in 2004 would now be worth R4 897.71

On top of its strong financial performance in recent years, the group was also named one of the best employers in the world.

Standard Bank was named the 18th best employer in the world by Forbes.

“It’s phenomenal to be recognised as one of the World’s Best Employers for the second year in a row,’ said Standard Bank CEO Sim Tshabalala.

“In fact, we’ve greatly improved our standing given that we were ranked 130th in 2023.”

Nedbank

Nedbank came in fourth place, with its share price increasing by 375% over the period.

This means that R1,000 in 2004 would now be worth R4,656.76.

Nedbank’s recent results have been strong, with the group posting higher dividends and profits in the first half of 2024.

This came despite a challenging economic environment and a depressed consumer sentiment.

Nedbank CEO Jason Quinn said the operating environment was challenging, and economic activity remained weak due to geopolitical uncertainty, high interest rates, persistent inflation, and fears surrounding the South African elections.

Household finances were also under pressure as real incomes contracted and job prospects were muted.

That said, Nedbank could still increase its headline earnings by 8% to R7.9 billion.

Absa

In last place is Absa, which has only seen its share price grow by 172.80% over the last twenty years.

This means that R1,000 invested in Absa shares in 2004 would now be worth R2,727.98.

Another concern for investors in the ‘big four’ bank is that its share price increase is below inflation, which totalled 189.3% over the last 20 years.

When inflation is taken into account, R1,000 in 2004 is now worth R2,892.77.

A large part of Absa’s issues is the revolving door of CEOs, with the group having had six CEOs since 2019.

Charles Russon was recently named as the new Interim CEO of the group, effective 15 October 2024.

Russon takes over from Arrie Rautenbach, who will serve gardening leave before entering early retirement.

Rautenbach’s early departure comes after the group’s headline earnings per share fell by 5% to 1,228.4 cents in the first six months of 2024.

Absa’s leadership changes have been well-documented, with former CEOs Daniel Mminele and the aforementioned Jason Quinn now leading Nedbank as Chairperson and CEO, respectively:

The leadership changes for the bank over the last decade and a half can be found below:

• Maria Ramos – March 2009 to February 2009

• René van Wyk – March 2019 to January 2020

• Daniel Mminele – January 2020 to April 2021

• Jason Quinn – April 2021 to March 2022

• Arrie Rautenbach – March 2022 to October 2024

• Charles Russon – October 2024 onward

Share performance

Read: Another bank calls it quits in South Africa