Natalie Cowling
Research Expert South Africa
Banking industry in South Africa - statistics & facts
The South African banking industry is the largest on the African continent. In 2022, the combined tier 1 capital of the sector reached over 42.2 billion U.S. dollars. Furthermore, the top four financial institutions in the country were among the 10 largest African banks in terms of asset value in the same year. The total assets of the banking sector represented around 88 percent of the South African GDP in 2020.
The leading banks
As of October 2023, there was an aggregate of 30 registered banks in South Africa, including domestic and foreign banks with local branches. However, five banks dominated the country's banking system: Standard Bank Group (Stanbank), First National Bank (FNB; the retail and commercial division of FirstRand), Absa Bank, Nedbank, and Investec. Those banks held around 90 percent of the banking assets in the country. Furthermore, along with Capitec, these big financial institutions had over 93 percent of the value of deposits. In terms of the number of customers served, Capitec Bank covered a more extensive base of clients at 19 million as of August 2022, despite having the lowest market share of deposits.Which bank is the most profitable?
Standard Bank Group received the highest value of profit in absolute terms among the leading banks of South Africa. The bank generated more than 2.3 billion U.S. dollars as of December 2022. FirstRand followed with a value of over 1.57 billion U.S. dollars and topped the ranking of financial institutions with the highest return on equity (ROE), with 20.6 percent in 2022. Absa came second with an ROE of 16.6 percent as of the same year. Absa also had the lowest cost-to-income ratio among the top banks, at 51.5 percent, indicating that the bank was the most profitable.A long way to greater online banking inclusion
South Africa's banking sector has significantly increased its customer base in the last decade. In 2023, almost 86 percent of the adults in the country had a bank account, compared to about 64 percent in 2014. Furthermore, online banking is expected to grow significantly in the coming years, with the world moving towards technological solutions. In fact, there were 21 digital banks in Sub-Saharan Africa in 2021, seven of which were registered in South Africa. In 2022, just over 44 percent of the country's population reported using online banking.
