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The Banking Industry
BY Louise Mitchell
South Africa
03 August 2018
R 14 400.00 (ZAR)  
estimated $ 1 081.44 (USD) *
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The South African Banking Sector


The South African banking sector which has total assets of R5.14-trillion, remains highly concentrated with the five largest banks holding 91% of total assets as of 31 December 2017. While the country’s big banks dominate, the sector is also diversified with 36 South African banking institutions registered with the Reserve Bank and 30 foreign banks with approved representative offices in South Africa. There are over 6,000 credit providers registered with the National Credit Regulator.


Sector Disruption and Competition


The banking landscape is changing rapidly as banks face increasing competition from technology-based financial services - from newly established banks to retailers offering mobile transactional banking accounts. Competition coming from newly-licensed commercial banks and growing credit granting from other credit providers is likely to encourage the big four banks to place increasing emphasis on growing customer numbers with innovative product offerings, especially to attract lower-income earners. Competition from newly established Discovery Bank, Bank Zero and TymeDigital, which aim to disrupt the sector, may force big banks to intensify efforts to modernise technology platforms to satisfy customers’ demands.


Challenges


While the resignation of Jacob Zuma as president and his succession by Cyril Ramaphosa resulted in the hope for political and economic stability and policy certainty, the issue of land expropriation without compensation has resulted in some pressure on the banking sector. In addition to agricultural land bonds, banks also provide extensive loans to the agricultural sector hedged against crop yields and other assets. Bank exposure to struggling state-owned entities and troubled companies like Steinhoff International have also weighed heavily on the sector, which has nevertheless retained its ability to cope with challenging economic conditions.


Report Coverage


As well as focusing on developments in the commercial banking sector, the detailed Banking Industry report includes information on Other Credit Granting, Lease Financing, and Loyalty and Reward Programmes. The report includes details on 90 organisations, fintech, digital banking, cryptocurrencies and other new technologies influencing the sector, as well as recent corporate actions and developments such as the demise of VBS Bank and the Competition Commission’s ongoing investigation into 17 banks relating to price fixing and market allocation in the trading of foreign currency. It includes details on the restructuring of overseas shareholdings in local commercial banks, resulting in the reorganisation of the Old Mutual Group and sell-down by Barclays of its stake in Barclays Africa with implications for two of the big banks, Nedbank and Absa.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 7
2.2. Geographic Position 9
3. SIZE OF THE INDUSTRY 9
3.1. Central Banking 11
3.2. Commercial Banking 12
3.3. Other Credit Granting 15
3.4. Lease Financing 18
4. STATE OF THE INDUSTRY 19
4.1. Local 19
4.1.1. Corporate Actions 28
4.1.2. Regulations 30
4.1.3. Enterprise Development and Social Economic Development 37
4.2. Continental 40
4.3. International 42
5. INFLUENCING FACTORS 44
5.1. Economic Environment 44
5.2. Government Intervention 46
5.3. Political Environment 47
5.4. Land Restitution 48
5.5. Operating Expenses 49
5.6. Expansion into Africa 49
5.7. Labour 50
5.8. Cryptocurrency 54
5.9. Information Technology (IT), Research and Development (R&D) and Innovation 54
5.10. Crime 58
5.11. Financial Inclusion 59
5.12. Environmental Concerns 62
6. COMPETITION 62
6.1. Barriers to Entry 64
7. SWOT ANALYSIS 65
8. OUTLOOK 66
9. INDUSTRY ASSOCIATIONS 66
10. REFERENCES 68
10.1. Publications 68
10.2. Websites 70
APPENDIX 1 73
Registered CFI’s as at October 2017 73
APPENDIX 2 76
Summary of Major Players in all Subsectors of the Banking Industry 76
COMPANY PROFILES – CENTRAL BANKING & BANKS AND OTHER BANKING SERVICES 90
ABSA BANK LTD 90
AFRICAN BANK LTD 95
BANK OF CHINA LTD 97
BANK OF TAIWAN 101
BIDVEST BANK LTD 104
BNP PARIBAS SA 107
CANARA BANK 113
CAPITEC BANK LTD 115
CHINA CONSTRUCTION BANK CORPORATION 118
CITIBANK N.A. 122
DEUTSCHE BANK AG 125
DITSOBOTLA PRIMARY SAVINGS AND CREDIT CO-OPERATIVE BANK LTD 145
FIRSTRAND BANK LTD 147
GBS MUTUAL BANK 152
GRINDROD BANK LTD 155
HSBC BANK PLC 158
ICICI BANK LTD 161
INVESTEC BANK LTD 165
JPMORGAN CHASE BANK N.A. 170
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA 173
MERCANTILE BANK LTD 178
NEDBANK LTD 181
OSK KOOPERATIEWE BANK LTD 190
SASFIN BANK LTD 192
SOCIETE GENERALE SA 195
SOUTH AFRICAN BANK OF ATHENS LTD (THE) 200
SOUTH AFRICAN RESERVE BANK 205
STANDARD BANK OF SOUTH AFRICA LTD (THE) 209
STANDARD CHARTERED PLC 213
STATE BANK OF INDIA 216
SUID-AFRIKAANSE POSKANTOOR (SOC) LTD 221
UBANK LTD 224
VBS MUTUAL BANK 227
VIRGIN MONEY SOUTH AFRICA (PTY) LTD 229
COMPANY PROFILES – ISLAMIC FINANCE SOUTH AFRICA 231
ABSA BANK LTD 231
ALBARAKA BANK LTD 236
FIRSTRAND BANK LTD 240
HABIB OVERSEAS BANK LTD 245
HBZ BANK LTD 247
STANDARD BANK OF SOUTH AFRICA LTD (THE) 250
COMPANY PROFILES – AUTOMOTIVE FINANCING 254
ABSA BANK LTD 254
ARIVA RENTALS (PTY) LTD 259
BIDVEST BANK LTD 261
BMW FINANCIAL SERVICES (SOUTH AFRICA) (PTY) LTD 264
FFS FINANCE SOUTH AFRICA (RF) (PTY) LTD 266
FIRSTRAND BANK LTD 268
IEMAS FINANCIAL SERVICES CO-OPERATIVE LTD 273
MERCEDES-BENZ FINANCIAL SERVICES SOUTH AFRICA (PTY) LTD 277
NEDBANK LTD 279
STANDARD BANK OF SOUTH AFRICA LTD (THE) 288
TOYOTA FINANCIAL SERVICES (SOUTH AFRICA) LTD 292
COMPANY PROFILES – RETAIL & SECTION 21 COMPANIES 295
AFRICAN DAWN CAPITAL LTD 295
BARKO FINANCIAL SERVICES (PTY) LTD 298
BAYPORT FINANCIAL SERVICES 2010 (PTY) LTD 300
BETTERLIFE GROUP LTD 305
BNP PARIBAS PERSONAL FINANCE SOUTH AFRICA LTD 307
C T INTERNATIONAL FINANCIERS (PTY) LTD 310
CAPITAL HARVEST (PTY) LTD 312
DISCOVERY LTD 314
FINBOND GROUP LTD 319
FOSCHINI GROUP LTD (THE) 324
FUNDI CAPITAL (PTY) LTD 328
GAUTENG ENTERPRISE PROPELLER 331
IEMAS FINANCIAL SERVICES CO-OPERATIVE LTD 334
INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LTD 338
ITHALA DEVELOPMENT FINANCE CORPORATION LTD 349
KUYASA HOUSING FINANCE COMPANY (PTY) LTD (THE) 352
LEWIS GROUP LTD 354
NATIONAL YOUTH DEVELOPMENT AGENCY (THE) 357
OLD MUTUAL FINANCE (RF) (PTY) LTD 360
ORANJEKAS SPAAR EN KREDIET KOOPERATIEF LTD 362
PHAKAMANI FOUNDATION 364
REAL PEOPLE HOME FINANCE (PTY) LTD 366
SA TAXI DEVELOPMENT FINANCE (PTY) LTD 368
SMALL ENTERPRISE FINANCE AGENCY LTD 370
SMALL ENTERPRISE FOUNDATION (THE) 374
THUTHUKANI FINANCIAL SERVICES HOLDINGS (PTY) LTD 376
TRANSACTION CAPITAL LTD 378
UBANK LTD 381
WOOLWORTHS FINANCIAL SERVICES (PTY) LTD 384
COMPANY PROFILES – REWARD & LOYALTY PROGRAMMES 387
ABSA BANK LTD 387
BRITISH AIRWAYS PLC 392
CLICKS GROUP LTD 397
COMAIR LTD 401
DINERS CLUB (S A) (PTY) LTD 406
DIS-CHEM PHARMACIES LTD 408
DISCOVERY VITALITY (PTY) LTD 417
EDCON LTD 420
EXCLUSIVE BOOKS GROUP (PTY) LTD 424
FIRSTRAND BANK LTD 428
FOSCHINI GROUP LTD (THE) 433
INVESTEC BANK LTD 437
MAHALA LOYALTY PROGRAM (PTY) LTD 442
MTN GROUP LTD 444
NEDBANK LTD 448
PICK N PAY STORES LTD 457
PRIMEDIA (PTY) LTD 462
SOUTH AFRICAN AIRWAYS (SOC) LTD 467
STANDARD BANK OF SOUTH AFRICA LTD (THE) 471
VIRGIN MONEY SOUTH AFRICA (PTY) LTD 475
VIRTUAL MARKET PLACE (PTY) LTD 477
VODACOM GROUP LTD 479
WELLNESS WAREHOUSE (PTY) LTD 483
WOOLWORTHS FINANCIAL SERVICES (PTY) LTD 486
COMPANY PROFILES – DIRECT HOME LOANS 489
ABSA BANK LTD 489
FIRSTRAND BANK LTD 494
INVESTEC BANK LTD 499
NBC HOLDINGS (PTY) LTD 504
NEDBANK LTD 507
OOBA (PTY) LTD 516
SA HOME LOANS (PTY) LTD 519
STANDARD BANK OF SOUTH AFRICA LTD (THE) 522