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Cape Town – Capitec Bank [JSE:CPI] is the country's fastest growing bank brand, while MTN [JSE:MTN] remains the most valuable brand, according to Brand Finance Africa’s top 50 valuable brands in South Africa.
Capitec is not only the nation’s fastest growing bank brand, but the fastest growing brand overall, according to the latest index, which was announced on Thursday.
READ: Why SA banks are truly world class
“Its brand value is up 25% to R5bn, with a Brand Strength rating of AAA-, claiming the title as one of strongest South African brands in the table overall,” Brand Finance Africa said in a statement.
“Capitec’s customer base continues to grow, with over 120 000 new customers added every month, putting the bank closer to 8.4 million customers at the end of 2016.
“The bank attributes its success to its simplified and affordable product offering, providing a competitive advantage over the often complex products offered by competitors. At the end of February 2017, Capitec enjoyed headline earnings of R3.8bn.
“It also scores highly on customer satisfaction – the bank emerged as the best in South Africa, garnering a score of 83.3% on the South African Customer Satisfaction Index (SAcsi) in April 2016.
The banking sector, comprising nine brands, outperformed all others with a total brand value of R100bn, making up nearly 25% of the total brand value of the table.
Telecoms follows in second place with R73bn, and retail in third with a total value of R49bn.
MTN remains the nation’s most valuable brand with a value of R40.8bn, up 10%, the index showed.
“The company’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, fuelled by regulatory, macro-economic and political challenges. In spite of these conditions, MTN continues to strive for growth.
“MTN invested R4.6bn to improve its network, working towards its aim of unlocking value in the digital-and data-adoption space for future growth. Data revenue contributed 20% to its revenue in the quarter ending March 2017.
Vodacom closing the gap
“Having said that, MTN’s brand value is nearly 30% lower than it was at its peak in 2014, illustrating a downward trend for the brand despite its growth. Vodacom, the nation’s second most valuable brand with a value of R24.3bn, is closing the gap.
"Should MTN continue its regressive trend, it may be that Vodacom closes the gap and usurps MTN as South Africa’s most valuable brand in the near future.”
READ: Vodacom's claim to be SA's best network is justified - ad authority
Brand Finance Africa found that despite being plagued with a recession, political instability and a higher unemployment rate, the total value of brands increased 3% year-on-year from R384bn in 2016 to R395bn in 2017.
“South Africa is in many ways typical of an emerging market with an economy founded on natural resources and mining, underpinned by banking and telcos,” said Jeremy Sampson, director of Brand Finance Africa.
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