Battle of the banks 2023: Capitec vs Standard Bank vs FNB vs Absa vs Nedbank
South Africa’s big banks have weathered some rough seas in the past year, with customers coming under severe strain due to the stagnant economy, the rising cost of living, and high interest rates.
But you would be hard-pressed to describe any of the country’s big lenders as being in trouble, with huge profits and growth being presented across the board.
While South Africa’s legacy banks – known as the ‘big five’, including Standard Bank, Absa, Nedbank, FirstRand and more recently Capitec – remain powerhouses in the banking space, newer entrants into the market are making a name for themselves.
Discovery Bank and TymeBank, in particular, have made significant inroads into traditional markets (on the high-LSM and low-LSM, respectively), while Bank Zero and other digital players are looking to disrupt under-served markets, particularly in the SMME space.
The banking market isn’t only facing challengers from the digital sphere either, with Old Mutual – one of the oldest financial companies in the country – also gearing up to launch its own bank in 2024.
Despite the new entrants (and those to come), it is difficult to emerge from the shadows of the big five, which either hold massive asset value or a huge customer base.
BusinessTech looked at the big five and measured their heft across 12 key metrics to determine which can truly call themselves the “biggest of the big”.
The data below covers both group and South African operations – for example, group data was used for employees and finances, while South African data was taken for customer numbers. FNB is represented by FirstRand Group, but FNB branches and ATMs were used for the figures. Share prices, market cap and P/E rations were taken from Google Finance data.
The data covers the following reporting periods:
- FirstRand – FY 2023 (ended June)
- Capitec – FY 2023 (ended February)
- Absa – FY 2022 (ended December)
- Nedbank – FY 2022 (ended December)
- Standard Bank – FY 2022 (ended December)
Market capitalisation and P/E ratio
Back in 2017, Capitec had the smallest market capitalisation among the big five retail banks but has since climbed to third-largest by this metric.
FirstRand, meanwhile, has solidified its position as the most valuable bank on the Johannesburg Stock Exchange.
When it comes to share price, Capitec far surpasses its peers. The group shot past the R1,000 per share mark in 2018 and now sits close to R1,720 a share. This is down from R1,775 per share at the same time last year.
This also makes Capitec the most expensive when looking at the price over earnings (P/E) ratio, almost double the next in line.
The P/E ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings. The ‘cheapest’ stock among the banks is Nedbank and Absa, with a P/E of 6.90 and 6.97, respectively.
| Bank | Market Cap | Share price | P/E Ratio |
| FirstRand | R380.0 billion | R67.73 | 10.88 |
| Standard Bank | R302.4 billion | R177.92 | 7.48 |
| Capitec | R199.7 billion | R1 720.06 | 20.49 |
| Absa | R155.0 billion | R173.02 | 6.97 |
| Nedbank | R99.5 billion | R203.72 | 6.90 |
Group Finances
Standard Bank is the top-earning institution among local banks, with a total income of R133.4 billion.
On top of being the biggest revenue generator, Standard Bank also pipped FirstRand in terms of profits, with its headline earnings at FY22 edging out FirstRand’s R36.7 billion.
FirstRand has historically been the top in terms of headline earnings.
Income reflects both the interest and non-interest income for the respective banks. Headline earnings measure a company based solely on operational and capital investment activities. It excludes income that may relate to staff reductions, sales of assets, or accounting write-downs.
In terms of headline earnings per share, Capitec is the clear leader by some margin.
| Bank | Income | Headline Earnings | HEPS (cents) |
| Standard Bank | R133.4 billion | R39.4 billion | 2 087 |
| FirstRand | R78.6 billion | R36.7 billion | 655 |
| Absa | R98.9 billion | R21.0 billion | 2 486 |
| Nedbank | R64.5 billion | R14.1 billion | 2 806 |
| Capitec | R24.0 billion | R9.7 billion | 8 420 |
Core capital and ROE
The Banker’s top 1000 banks report is based on a measure of a bank’s Tier 1 Capital – known as core capital, which consists of shareholders’ equity and retained earnings.
South Africa’s banking sector is again led by Standard Bank, which retains its position as the biggest bank in the country when measuring capital.
This is followed by FirstRand, which, along with retaining its number two spot, was also the biggest gainer over the past 12 months.
We have also included Return on Equity (ROE) as a measure for 2023. ROE is considered a gauge of a corporation’s profitability and efficiency in generating profits.
The higher the ROE, the more efficient a company’s management is at generating income and growth from its equity financing.
Among the SA banks, Capitec carries the highest ROE.
| Bank | Tier 1 Capital ($m) | ROE (%) |
| Standard Bank | $11 690 | 16.4% |
| FirstRand | $10 087 | 21.2% |
| Absa | $8 041 | 15.6% |
| Nedbank | $5 925 | 14.0% |
| Capitec | $1 900 | 26.0% |
Network
While the big banks face pressure from digital players, they still maintain wide networks of physical points of presence while also making digital interactions more accessible.
Several groups – like Nedbank, FNB and Capitec – have worked to integrate digital with physical access; for a lot of South Africans, interacting with a real person remains an integral way to deal with their money.
The banks have made it clear that a physical presence is still vital to servicing customers. Branches and ATMs are still crucial to operations and, in some cases, even expanding.
Standard Bank has the most physical branches available out of the big five, while Capitec has the most auto-teller machines.
| Bank | Branches | ATMS |
| Standard Bank | 1 163 | 6 232 |
| Capitec | 860 | 7 898 |
| Absa | 621 | 5 364 |
| FirstRand (FNB) | 614 | 4 789 |
| Nedbank | 545 | 4 807 |
People
One of the most common ways to determine the size of a bank is to look at its customer base.
This metric is becoming an interesting game among all banks in South Africa, with the digital-only bank TymeBank now serving just as many customers as Nedbank.
Capitec has grabbed headlines over the years for its strong growth and sits comfortably as the largest retail bank in the country in terms of active retail customers.
At the end of its latest financial year, the group reported 20.1 million active customers – meaning over a third of South Africa’s population now banks with the group.
In stark contrast, Capitec also has the lowest number of employees of all the banks.
Reflecting the massive scale of their respective businesses, Standard Bank and FirstRand have the most employees across their operations.
| Bank | Employees (Group) | Customers (SA) |
| Capitec | 15 451 | 20.1 million |
| Standard Bank | 52 742 | 10.8 million |
| Absa | 35 451 | 9.7 million |
| FirstRand | 50 493 | 9.5 million |
| Nedbank | 25 924 | 7.0 million |
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