The South African banking system is well developed and effectively regulated, comprising a central bank the South African Reserve Bank. As well as a few large, financially strong banks and investment institutions, and a number of smaller banks. Many foreign banks and investment institutions have operations in South Africa (SA).
Investment and merchant banking remains the most competitive front in the industry, such as Rand Merchant Bank (RMB), which dominates in investment banking. This was proven when RMB won the Investment Bank of the Year award in 2017 for the fifth year running. The award is made by the “African Banker magazine” to the most innovative investment bank operating in Africa.
While in the retail market the country’s big five” banks Absa, FNB, Standard Bank, Nedbank and newcomer Capitec dominate. Capitec in June 2017 had become the second biggest bank in SA. When it revealed that it had just hit nine million retail customers thus surpassing Absa by some margin.
In reporting its full year results for the year ended February 2017, Capitec said that it added 1.3 million customers in the preceding 12 months to take it to 8.6 million customers. It added 400 000 more customers in the next five months to June 2017, reported “BusinessTech”.
It should be noted that client numbers are only one metric to look at when looking at the ‘biggest’ banks. Standard Bank is the biggest bank in SA, due to it having the most clients, branches and employing the most people. But it has a smaller market cap than FirstRand, and also slips behind the FNB owner in terms of headline earnings, while Absa has the widest ATM network, reported “BusinessTech”.