Is Capitec really bigger than Nedbank?

May 09 2013 11:45

Capitec has taken banking by storm but it's not SA's fourth-biggest retail bank, says Finweek editor Marc Ashton. (Fin24)

Company Data


Last traded 926
Change 5
% Change 1
Cumulative volume 31241
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 222
Change 2
% Change 1
Cumulative volume 110763
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 1
Change 0
% Change -5
Cumulative volume 111950
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Capitec ousts Nedbank from No 4 slot

Capitec ups earnings, customers

Capitec forecasts higher earnings

FNB, MTN satisfy customers most - survey

Nedbank is SA's most expensive bank

Cape Town – Finweek editor Marc Ashton has disputed AMPS data which places Capitec Holdings [JSE:CPI] ahead of Nedbank Group [JSE:NED] as South Africa’s fourth-biggest bank by market share.

Ashton wrote: “I read with some amazement that ‘South Africa’s fastest growing retail bank for individuals, Capitec Bank Holdings, has overtaken Nedbank Group as South Africa’s fourth-largest bank by market share, according to the latest AMPS figures’.

“According to the release around the AMPS figures, the findings show an increase in Capitec’s market share from 7.9% to 10.8% between January and December 2012.

"This is a 43% year-on-year increase for the bank among the main bank population of 22 million. It goes on to say that Capitec’s total client base increased by 26% to 4.7 million active clients.

“Sure, that is fantastic, but…

“Nedbank Retail (according to their last annual financial statements) had 5.9 million clients, still somewhat bigger than the 4.7 million at Capitec.

“Capitec makes R1.3bn per year from transaction fees while Nedbank Retail had non-interest revenue (NIR) of R7.9bn in the previous fiscal. That’s still a relatively large difference.

“Nedbank Retail lent out R187bn in the last financial year while Capitec put in a spirited performance with an impressive R27.9bn.

“Finally, on the deposit front Capitec is doing nicely and are sitting with a bit more than R29bn - which is awesome. However, they still have some way to go before they get near the R93bn at Nedbank.

“In humble conclusion, the argument might get chucked back that the AMPS figures reflect ‘market share’ which is also debatable because if this is based on the amount of money loaned out, African Bank Investments [JSE:ABL] had net advances of R46bn which also trumps the R29bn from Capitec.

“Capitec is a fantastic success story and one that has shaken up the South African banking industry quite significantly. However, just to be clear, it is nowhere near South Africa’s fourth largest retail banking operation.”

The difference

“In terms of assets, advances, deposits and NIR, Nedbank is significantly larger than Capitec,” Adrian Cloete, an equity analyst at Cadiz Asset Management, told BusinessTech.

But AMPS was only referring to the number of retail clients, and one must remember that Capitec and the big four banks operate in different market segments. The big four also offer more products (home loans, vehicle loans, etc), he said.

He added that Capitec has a lower pricing structure on banking charges compared with the average product of the big retail bank, and this will also affect the level of NIR.

Capitec responds

Capitec’s Charl Nel said on Thursday the bank does not claim to be No 4 in size of assets, which Ashton correctly alludes to, but does claim the No 4 spot in terms of market share (according to AMPS) in the specific retail banking segment.

Nedbank confirmed the AMPS data in the BusinessTech report. “Nedbank acknowledges the findings of the latest AMPS survey, which focused on ‘main bank’ population as an indicator of market share growth for 2012,” Anton de Wet, managing executive of client engagement at Nedbank, told BusinessTech.

He added that during the period under review Nedbank grew its retail client base by more than 650 000, bringing its base to 6.1 million at a group level as at December 31 2012.

“This growth is on the back of more than 2 million new accounts being sold to new and existing clients during 2012, equating to almost 40% of our clients with two or more products.”

Nel said with regard to client numbers, there is a difference between active banking clients (that provide a monthly fee income – 4.7 million clients at the end of Capitec's financial year) and accounts opened.

“We only ever refer to our active clients when we quote numbers ourselves.

"However, have a read again at the particular question AMPS asked [Which ONE bank do you regard as your main bank for all your banking transactions?] to clarify the numbers provided and how they (AMPS) compare the banks.”

Adds Nel: “AMPS figures are what they are and as the most credible research in SA, we are extremely pleased with the outcome of the latest AMPS figures. We have worked and continue to work hard to improve on this.”

 - Fin24

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

nedbank  |  capitec  |  african bank  |  sa economy  |  banks



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What’s on your gift list this Christmas?

Previous results · Suggest a vote