Banks in South Africa

Publication Date :

26 Jul, 2023

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Table Of Contents

What Are Banks In South Africa?

South Africa is one of the great examples of the organized banking sector with a steady economic growth like the United States. It has various kinds of banks like Mutual Banks, Co-operative Banks, Foreign Banks, Private Banks, including Commercial Banks, Merchant Banks and Other Banks operating therein with more than R5 Trillion assets.

These banks in South Africa offer retail and commercial banking services and merchant banking, investment banking, and wealth management services across the globe. Similar to any other industry, the banking landscape of South Africa has seen some changes and developments over time. This article give an overview of the various important banks operating in the country.

What Are Banks In South Africa?

Banks In South Africa Explained

The South African Banking industry has a very hih leel of concentration due to continuous economic isolation during 1980s. Among all the banks registered in the country, the biggest four has almost 70% of the total assets and control the main market share. The other banks are small ones which mainly focus on specific communities, regions or particular banking activities and services.

The best banks in South Africa controlling the major part of the market are developing due to continuous innovation in technology, making their system more sophisticated, user friendly and at par with that in developed economies. These banks have become more accessible and have successfully expanded cross countries. They deal with financial instruments that are complex, but efficient in hedging against the risk of investors.

Technological innovation is also being used to make the banking system more cost effective and smooth, making the market modernized and liberal as compared to a few years back. South Africa has been participating actively in the process of globalization and implementing economic policies that are flexible as well as competitive. Capital market restructuring, exchange deregulation and control are some important steps taken by the investment banks in South Africa, thus promoting trade in equity, derivatives and bonds, upgrading the payment, clearing and settlement system and promoting participation in the global financial markets.

History

South Africa is a developing country but has a well-developed and sophisticated banking system that primarily helps provide ease in doing business. Moreover, efficient banking channels and wide banking networks make this country internationally feasible in providing global banking services. One can find a bunch of prominent best banks in South Africa, which are regional, national, and international banks effectively operating in South Africa.

RAND is the currency of South Africa which was signed as “R.” The South African Reserve Bank is a Central Bank of the Republic of South Africa, and it was established in 1921. It has a head office in Pretoria, South Africa. The bank's primary purpose is to achieve and maintain price stability in the interest of balanced and sustainable economic growth in South Africa. Together with other institutes, investment banks in South Africa also plays a pivotal role in ensuring financial stability within the country.

List Of Top 10 Banks In South Africa

Given below is a list of banks in South Africa according to their market share, customer base and satisfaction. Let us try to study banks in Suth Africa list individually.

Standard Bank
FirstRand
Barclays Africa Group Limited
Nedbank
Investec
Capitec
African Bank
Grindrod Bank
Mercantile Bank
Bidvest Bank

Based on the financial statements of various companies for the year ending 2017, we discuss the details of this banks in South Africa list based on the size of their assets.

#1. Standard Bank

The Standard Bank Group is the largest African banking group with total assets of around R2 Trillion (USD 153 Billion), with a market cap of approximately R310 Billion (USD 23 Billion), offering a range of banking and related financial services across sub-Saharan Africa. The Group has 155 years’ operating history in South Africa, with its headquarter located in Johannesburg, and employs more than 54,000 people.

The Group has produced strong financial results at the end of the last financial year on 31st December 2017, like a 14% growth in headline earnings to R26.3 Billion with a 17.1% Return on Equity. The Group operates globally and primarily provides services of a) Personal & Business Banking, i.e., banking and other financial services to individual customers and SMEs in Africa. b) Corporate & Investment Banking services in, for, and across Africa. c) Wealth Management Services to manage, grow, and ensure their customers' wealth and d) Other Banking Services.

#2. FirstRand

FirstRand was created in its current form in 1998 through a merger of the Anglo American Corporation of South Africa Limited and RMB Holdings(RMB). It was headquartered in Johannesburg, South Africa, and employs more than 44,000 people. It is the second-largest bank in South Africa, with around R1.2 Trillion (USD 92 Billion). FirstRand’s integrated financial services businesses portfolio comprises FNB, RMB, Aldermore, and Ashburton Investments.

The Group operates in South Africa, certain markets in sub-Saharan Africa and the UK, and offers a universal set of transactional, lending, investment, and insurance products and services. The Group has accomplished the total comprehensive income of R28.79 Billion for the year ending as of 30th June 2018, i.e., 19% rise from the previous year and 23% as Return on Equity.

#3. Barclays Africa Group Limited

It was formerly known as ABSA Group Limited. Barclays Africa Group Limited is the financial services provider in Africa offering personal and business banking, corporate and investment banking, wealth, and investment management services.

It is a wholly-owned subsidiary of Barclays, and it has headquarters in Johannesburg, South Africa, and employs more than 39,000 people. It is the third-largest bank in South Africa, with total assets of around R1.1 Trillion (USD 85 Billion) as of 2017.

#4. Nedbank

It is one of the largest Banks in South Africa, with a Market Capitalisation of R128 Billion as of 31st December 2017. They offer a wide range of wholesale and retail banking services, growing insurance, assets management, and wealth management services in 39 countries worldwide through its 2000 plus branches and employ more than 31,000 employees. Its headquarter is located in Sandton. It has total assets of around R892 Billion (USD 69 Billion) as of 2017 and comes on the fourth rank.

#5. Investec

Investec is an international specialist banking & asset management firm. It provides a range of financial products and services, including investment, assets and wealth management, retail, corporate, investment banking to the clients’ base in Europe, Africa, and Asia-Pacific.

It was headquartered in Johannesburg, South Africa, and 8,200 people are employed by the company worldwide. It is the first South African company to list in London and Johannesburg Stock Exchanges. It has total assets of around R415 Billion (USD 32 Billion) as of 2017

#6. Capitec

Capitec is a retail bank in South Africa, headquartered in Western Cape and operating through 800 retail branches nationwide with 9.9 Million active clients. About 11,400 employees are working with the bank. It has total assets of around R87 Billion (USD 6.7 Billion). The company also provides commercial and investment banking activities in Africa, and as per audited financial statements of 2018, the headline earnings are up 18% to R4.46 Billion, and Return on Equity is 27%.

#7. African Bank

African Bank Limited is a private sector financial service provider retail bank offering a wide range of products and services to the consumers of South Africa, including loans, investment, debit, and credit card services. It is a subsidiary company of African Bank Holdings Limited. Its headquarter is located in Johannesburg, South Africa. African Bank Limited has total assets of around R32 Billion (USD 2.5 Billion) and gross earning of R5.7 Billion as of 31st September 2017.

#8. Grindrod Bank

It is a private sector commercial bank in South Africa licensed as a “Locally Controlled Financial Institution” by the Reserve Bank of South Africa. It was founded in 1994 and had offices in Johannesburg, Durban, Cape Town, and Pretoria of South Africa.

Grindrod Bank primarily provides corporate finance, investment banking, corporate lending, deposit, and property-related products and services to private, corporate, and institutional clients. The Bank has total assets of around R16.68 Billion (USD 1.3 Billion) as of 31st December 2017.

#9. Mercantile Bank

Mercantile Bank is a commercial bank founded in 1965 and headquartered in Sandown. It is a fully owned subsidiary company of Mercantile Bank Holdings Limited. Mercantile Bank Holdings Limited is a bank controlling an investment holding company with (100%) vesting in its Portuguese parent company, Caixa Geral de Depositos (“CGD”).

Mercantile Bank provides a wide range of international and local banking services to the business community, focusing on the Portuguese market. In contrast, the bank’s main focus is business, commercial, and alliance banking activities. The Bank has total assets of around R12.8 Billion (USD 984 Million) as of 31st December 2017.

#10. Bidvest Bank

Bidvest Bank is a private sector commercial bank in the Republic of South Africa licensed as a “Locally Controlled Financial Institution” by the Reserve Bank of South Africa. It was founded in 1998 and had its head office in Johannesburg, South Africa. The bank is a 100% subsidiary of its parent company, Bidvest Group Limited, a South African-based international business conglomerate. The bank focuses on providing various retail banking products across South Africa. The total asset position of the bank increased by 13% to R7.8 Billion (around USD 600 Million) as of June 2017.

However, it is important to note that the market share and the level of performance, profitability and customer base may change due to the ever changing landscape of the industry. It is best to refer to the latest financial reports and analysis published by economists and analysts every year to get the updated picture. The South African Reserve Bank, which is responsible for controlling and regulating the entire operation of the banking sector in the country, publishes official reports based on their research and study. They give a valuable and detailed insight into the industry and its current trends.