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In South Africa, the financial sector is 10.5% of the nation’s gross domestic product. The industry has survived relatively unscathed from such challenges as the global recession, ratings agency downgrades and poor local economies. Steady growth is expected in the industry.
In 2014, the banking industry in South Africa had assets totaling $332.2 billion, having grown 7.8% annually from 2010 to 2014. The most lucrative market was the bank credit segment, valued at $292.2 billion, 81% of the industry’s total value.
To find out more, consult Gatestreet’s Banking Industry in South Africa in 2015 report and Marketline’s Banks in South Africa report.
Africa has been called the continent of dreams because of its seemingly endless potential for growth. This growth is partially fueled by the growth of the middle class, now a third of Africa’s population, according to African Development Bank Group.
It is estimated that, by 2020, the sub-Saharan African retail bank market will be 19% of the area’s GDP.
South Africa leads the way on the African continent in the banking industry. A billion people live in Africa and large percentages of the population have no access to financial institutions, according to The Economist.
Technology is helping to bring banking to a large customer base. New computer systems are being installed across the continent, and banks are quickly doing business in large areas. South Africa’s Standard Bank, for example, operates in 18 nations while another bank, FirstRand, also has been expanding.
Net interest margins in South Africa are 4%. Most South African banks have opted for organic growth other than acquisitions, but not all. Earlier this year, South African bank, Absa, which is majority owned by Barclays, announced it was purchasing Barclays’ other African banks. Others banks have opted to be investment banks, allowing them to be nimble but have a large geographic reach.
South African banks are working on entering new markets. Capitec, which historically has catered to low income bankers, is now seeing 44% of its growth coming from higher income customers, according to Citizen. The bank also intends to issue its own credit card later this year.
Between Feb. 2015 and Feb. 2016, Capitec increased its market share to 21%. Its goal is 25%. Between Dec. 2015 and February, it added an average of 140,000 new customers monthly.
If you would like a broader view, we recommend Finaccord’s Global Retailer Consumer Finance and Banking report. It examines 6,000 brands in six areas – South Africa, Asia, Australasia, Europe, Latin America and North America – as well as nearly 1,500 financial programs and products.
Of all the regions featured in the report, South Africa has the most retail brands with a provisional rate of 9.2%.
We hope this information has been helpful to you. There is more useful information about the African banking industry market in ReportLinker’s portal. If you have any additional questions or needs, please feel free to contact us.