The biggest banks in South Africa in 2024 – BusinessTech

The Banker has published its ranking of the top 1000 banks in the world—as measured by their level of tier 1 capital—with six South African institutions making the list in 2024.

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, Absa and Nedbank.

According to The Banker, South Africa’s banks continue to dominate other banks on the continent but warned that this position is becoming more precarious, with lenders in other African countries—Morocco in particular—closing the gap.

This is because the local banks’ growth tracks South Africa’s economic growth, which has been extremely weak over the past few years. In 2023, the economy managed to scrape by with 0.6% GDP growth, narrowly dodging a technical recession in a couple of quarters.

However, on a GDP per capita basis, the country has been in recession for quite some time, and prospects for 2024—while imporved—are not that much better, with the International Monetary Fund pencilling in another bleak year of only 0.9% growth.

This is dismal compared to the 3.8% average expected for Sub-Saharan Africa, with The Banker also flagging a weak rand that will continue to act as a “brake” on banking performance in dollar terms.

Despite these issues, the publication noted that “all the banks reported solid results in local currency terms in their most recent annual results”, with a few standing out in dollar terms regardless.

Looking at Tier 1 capital among the local banks, Standard Bank and Capitec were the only local banks to increase their capital, with the rest dropping compared to the 2023 ranking.

Standard Bank Group remains the largest lender by Tier 1 capital and assets in the country and the continent, even as its assets dropped slightly in dollar terms in 2023, The Banker noted.

Capitec was also the only bank to increase in Tier 1 capital, assets and pre-tax profits in dollar terms and was also the only bank to rise in the global rankings.

The Banker focuses on the Top 5 banks and did not provide figures for Capitec’s Tier 1 capital; however, given the information available—and its positioning in 2023—we are able to calculate an estimate that puts it above US$2 billion.

Capitec’s return on assets hit 5.09% for 2023, second only on the continent to Nigeria’s Guaranty Trust Bank. 

In addition to tracking Tier 1 capital, The Banker also compiles and overall banking performance ranking based on eight key performance indicators across the banks.

These range from growth and profitability to liquidity, return on risk and overall soundness of the banks.

Taking all eight indicators into account, Standard Bank and FirstRand maintain their top two positions in South Africa as the best-performing banks, with Nedbank ranking third.

This is the top local bank in each indicator:

Read: Capitec on top in South Africa