South Africa’s Banks Maintain Stronghold Amid Economic Struggles: Standard Bank Still on Top of Africa, FirstRand Follows

Despite facing significant economic challenges, South Africa remains the epicenter of Africa’s banking industry. The six South African banks, led by the big four—Standard Bank Group, FirstRand, Absa Group, and Nedbank Group—comprise half of the continent’s total asset and Tier 1 capital base.

For the second consecutive year, South Africa’s leading banks hold the top positions in Africa, though their dominance is increasingly under threat, especially from Moroccan banks. The International Monetary Fund (IMF) projects South Africa’s economic growth to remain sluggish at 0.9% for 2024, compared to 3.8% for sub-Saharan Africa, with the weak rand hindering performance in dollar terms.

While all four major banks reported solid annual results in local currency, only Standard Bank Group, the overall leader, showed an increase in Tier 1 capital and pre-tax profits in dollar terms, while all four saw a decline in assets. Collectively, the six South African banks experienced a 1.75% decrease in Tier 1 capital and a 2.76% drop in assets, affecting their global rankings. Investec, the fifth-placed lender, suffered the most, dropping 50 places to 519th position.

Capitec Bank Holdings, ranked sixth, was the only South African bank to show increases in Tier 1 capital, assets, and pre-tax profits in dollar terms, improving its position by three places to 559th. Capitec’s return on assets reached 5.09% for 2023, second only to Nigeria’s Guaranty Trust Bank on the continent.

Standard Bank remains at the top for both the country and the continent. The bank’s headline earnings rose by 27% in local currency during 2023, with its operations in other African countries—Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda, Zambia, and Zimbabwe—contributing 42% to its earnings.

Standard Bank’s Tier 1 capital base is 23% larger than its nearest continental competitor, FirstRand. It also leads South Africa’s performance metrics for the second year in a row, excelling in profitability, return on risk, and liquidity.

FirstRand holds the second position again, leading in growth and operational efficiency, and scoring highly in profitability, asset quality, and return on risk.

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