{"id":86284,"date":"2015-05-04T00:05:16","date_gmt":"2015-05-03T22:05:16","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=86284"},"modified":"2015-05-03T23:36:06","modified_gmt":"2015-05-03T21:36:06","slug":"battle-to-be-the-biggest-bank-in-sa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/86284\/battle-to-be-the-biggest-bank-in-sa\/","title":{"rendered":"Battle to be the biggest bank in SA"},"content":{"rendered":"

Looking at the latest full-year data from South Africa’s biggest retail banks,\u00a0there is a clear battle between FirstRand and Standard Bank Group to be the biggest bank in the country.<\/p>\n

Standard Bank recently released its full-year results for the 2014 financial year, the last of the big five banks to do so.<\/p>\n

With all the full year data at hand (including the 2015 full year data for Capitec), we are able to paint the current standings of the South African retail banking market.<\/p>\n

Looking at market value, customer base and profits of all the banks, Standard Bank and FirstRand come out as the top two contenders for the title – a position once held with a degree of consistency by the former.<\/p>\n

Notably, Standard Bank lost its crown as South Africa’s most valuable JSE-listed bank last year when FirstRand Group overtook the former champion in terms of market capitalization.<\/p>\n

Pushing into 2015, with further stumbles by Standard Bank, the FirstRand Group remained firm in the lead position with a market cap of R320.4 billion, versus Standard Bank’s R280 billion.<\/p>\n

Biggest market cap (30 April 2015)<\/h3>\n
\n\n\n\n\n\n\n\n
Bank<\/strong><\/td>\nMarket Cap\u00a0<\/strong><\/td>\nP:E ratio<\/strong><\/td>\n<\/tr>\n
FirstRand<\/td>\nR320.41 billion<\/td>\n15.8<\/td>\n<\/tr>\n
Standard Bank<\/td>\nR283.17 billion<\/td>\n16.2<\/td>\n<\/tr>\n
Absa<\/td>\nR161.89 billion<\/td>\n12.4<\/td>\n<\/tr>\n
Nedbank<\/td>\nR127.71 billion<\/td>\n12.1<\/td>\n<\/tr>\n
Capitec<\/td>\nR65.17 billion<\/td>\n25.5<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

Data from Bloomberg<\/small><\/p>\n

Biggest customer base<\/h3>\n

One area where Standard Bank has maintained its lead, however, is in its customers.<\/p>\n

The market share landscape has remained fairly stable in South Africa over the past few years in terms of bank placement.<\/p>\n

Standard Bank remains the bank with the biggest customer base in the country, followed by Absa, which recovered from a significant dip in 2013.<\/p>\n

FirstRand’s retail banking arm, FNB, which had seen massive growth in customers following an aggressive marketing push in 2012\/13, is the only bank which saw a drop in customer numbers, year on year, between 2013 and 2014.<\/p>\n

In it’s full year report for 2014, FNB indicated a customer base of 7.1 million customers, down significantly from the 7.6 million reported in 2013.<\/p>\n

However, the loss of government\u2019s social grant tender resulted in the bank losing a big portion of mass market customers, accounting for the decline.<\/p>\n

As at December 2014 – 6 months after the reported full year results, FNB reported having 7.3 million retail customers in South Africa.<\/p>\n

\n\n\n\n\n\n\n\n
Bank<\/b><\/span><\/td>\nCustomers 2013\/14<\/strong><\/td>\nCustomers 2014\/15<\/strong><\/td>\nChange<\/strong><\/td>\n<\/tr>\n
Standard Bank<\/td>\n10.4 million<\/td>\n11.1 million<\/td>\n6.7%<\/strong><\/span><\/td>\n<\/tr>\n
Absa<\/td>\n8.6 million<\/td>\n9.2 million<\/td>\n7.0%<\/strong><\/span><\/td>\n<\/tr>\n
FNB<\/td>\n7.6 million<\/td>\n7.3 million<\/td>\n-3.9%<\/strong><\/span><\/td>\n<\/tr>\n
Nedbank<\/td>\n6.7 million<\/td>\n7.1 million<\/td>\n6.0%<\/strong><\/span><\/td>\n<\/tr>\n
Capitec<\/td>\n5.8 million<\/td>\n6.2 million<\/td>\n6.9%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

Biggest profits<\/h3>\n

The last measure for title of the “biggest” looks at revenue, and more importantly, profits.<\/p>\n

Standard Bank boosted both revenue and profit by 15% in 2014, pushing the former up to R84.2 billion, and the latter to R18.1 billion.<\/p>\n

FirstRand prefers to report normalised results,\u00a0believing it to be\u00a0the most accurate reflection of\u00a0its economic performance.<\/p>\n

The group reported a boost in normalised earnings to R18.7 billion in 2014\u00a0– making it the biggest profit spinner of all the banking groups –\u00a0though the breakdown of FNB’s financial performance provides more insight into the bank’s income at retail level.<\/p>\n

FNB recorded a net income of R37.6 billion, and normalised earnings of R9.46 billion for the last financial year ended June 2014.<\/p>\n

\n\n\n\n\n\n\n\n\n
Bank<\/strong><\/td>\nRevenue<\/strong><\/td>\nHeadline \/ Normalised earnings<\/strong><\/td>\n<\/tr>\n
FirstRand<\/td>\n–<\/td>\nR18.7 billion<\/td>\n<\/tr>\n
Standard Bank<\/td>\nR84.2 billion<\/td>\nR18.15 billion<\/td>\n<\/tr>\n
Absa<\/td>\nR63.1 billion<\/td>\nR13.03 billion<\/td>\n<\/tr>\n
Nedbank<\/td>\nR23.0 billion<\/td>\nR9.78 billion<\/td>\n<\/tr>\n
FNB<\/td>\nR37.6\u00a0billion<\/td>\nR9.46 billion<\/td>\n<\/tr>\n
Capitec<\/td>\nR10.8 billion<\/td>\nR2.55 billion<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

Brand Value<\/h3>\n

Asset valuation consultancy, Brand Finance, in association with The Banker, released its 2015 Banking 500 list earlier in the year, which ranks the world\u2019s top 500 banking brands according to their brand value.<\/p>\n

Brand value is determined through the \u201croyalty relief\u201d method, which determines the value a company would be willing to pay to license its brand as if it did not own it.<\/p>\n

In 2014\u2019s ranking, Standard Bank was rated as the most valuable banking brand in the country \u2013 a position it has now lost to two other banks, having lost 21% of its brand value over the course of the past year.<\/p>\n

According to the group’s ranking, \u00a0SA\u2019s most valuable banking brand is\u00a0Absa, which boosted its banking brand value by\u00a030% to US$1.58 billion from US$1.2 billion in 2014.<\/p>\n

Also shooting past the former number one, First National Bank grew its brand value by 31% to US$1.38 billion from just over US$1 billion the previous year.<\/p>\n

The remaining SA banks \u2013 Nedbank, Investec, WesBank and RMB \u2013 all slipped down the list, having lost brand value according to Brand Finance\u2019s metric.<\/p>\n

Capitec was not ranked.<\/p>\n

South African banks brand value<\/h3>\n
\n\n\n\n\n\n\n
Bank<\/strong><\/td>\nBrand Value 2015<\/strong><\/td>\nBrand Value 2014<\/strong><\/td>\nChange<\/strong><\/td>\n<\/tr>\n
Absa<\/td>\nR189.1 billion<\/td>\nR145.9\u00a0billion<\/td>\n30%<\/td>\n<\/tr>\n
FNB<\/td>\nR165.3\u00a0billion<\/td>\nR126.0\u00a0billion<\/td>\n31%<\/td>\n<\/tr>\n
Standard Bank<\/td>\nR150.8\u00a0billion<\/td>\nR190.3\u00a0billion<\/td>\n-21%<\/td>\n<\/tr>\n
Nedbank<\/td>\nR139.5\u00a0billion<\/td>\nR142.7\u00a0billion<\/td>\n-2%<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

More on Banking<\/h3>\n

How much SA\u2019s banking CEOs earn<\/a><\/strong><\/p>\n

Most valuable banking brands in South Africa<\/a><\/strong><\/p>\n

South African banking fees 2015<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Looking at the latest full-year data from South Africa’s biggest retail banks, there is a clear battle between two giants to be the biggest bank in the country.<\/p>\n","protected":false},"author":10,"featured_media":44482,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[29,1798,4088,76,26,1799,499],"class_list":["post-86284","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-absa","tag-capitec","tag-firstrand","tag-fnb","tag-headline","tag-nedbank","tag-standard-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/86284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=86284"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/86284\/revisions"}],"predecessor-version":[{"id":86342,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/86284\/revisions\/86342"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/44482"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=86284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=86284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=86284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}