The Banker has published its 2024 ranking of the world's top 1000 banks based on tier 1 capital levels, with six South African banks making the cut.
Standard Bank remains the leading bank in South Africa by capital, followed by FirstRand, Absa, and Nedbank.
The Banker notes that while South Africa's banks continue to outperform other African banks, this lead is becoming less secure. Banks in countries like Morocco are closing the gap.
This trend is partly due to the slow growth of South Africa's economy, which saw a modest 0.6% GDP growth in 2023, barely avoiding a technical recession in several quarters.
On a GDP per capita basis, the country has been in recession for some time, and the outlook for 2024 is slightly better, with the IMF predicting only 0.9% growth.
In comparison, Sub-Saharan Africa is expected to average 3.8% growth, and a weak rand continues to hinder banking performance in dollar terms.
Despite these challenges, South African banks reported strong results in local currency terms in their most recent annual reports. Standard Bank and Capitec were the only local banks to increase their tier 1 capital, with the others seeing declines compared to the 2023 rankings.
Standard Bank Group remains the largest lender by tier 1 capital and assets in South Africa and the continent, even though its assets slightly declined in dollar terms in 2023, according to The Banker.
Capitec also saw increases in tier 1 capital, assets, and pre-tax profits in dollar terms and improved its position in the global rankings.
Although The Banker did not provide specific figures for Capitec’s tier 1 capital, estimates based on available data suggest it exceeds $2 billion.
The Banker creates a comprehensive ranking of bank performance by evaluating eight key indicators.
These indicators include growth, profitability, liquidity, return on risk, and overall financial health. Considering all these factors, Standard Bank and FirstRand hold the top two spots as the best-performing banks in South Africa, with Nedbank coming in third.
Indicator | 1st | 2nd | 3rd |
Growth | FirstRand | Standard Bank | Absa |
Profit | Standard Bank | FirstRand | Nedbank |
Operational Efficiency | FirstRand | Nedbank | Standard Bank |
Asset Quality | Investec | FirstRand | Standard Bank |
Return on Risk | Standard Bank | FirstRand | Nedbank |
Liquidity | Standard Bank | Nedbank | Absa |
Soundness | Absa | Standard Bank | Nedbank |
Leverage | Absa | Standard Bank | Nedbank |
Overall | Standard Bank | FirstRand | Nedbank |
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