It was late last year when rumours began to circulate that the government has been looking into launching the first state-owned bank, which is hilarious, considering the dismal state of every other state-owned company in South Africa.
The proposed amendments to the South African Banks Act – published for public comment in May of last year – will pave the way for this monstrosity. The amendments would allow a state-owned entity to fully participate in the retail and commercial banking sector, in competition with the private sector, for the very first time in South Africa.
As it currently stands, the Banks Act only allows public companies to register as a bank or bank controlling company, and state-owned companies have to jump through a number of hoops and obtain numerous exemptions in order to perform bank-like functions.
The amendments, however, will remove the need for these exemptions. Entities such as the Postbank (which is a division of the disturbingly incompetent South African Post Office) and the Land Bank would be permitted to register and operate as fully operational banks.
Customer satisfaction does not look very promising.
So! There are certainly interesting times ahead for the South African banking landscape, but until that horrifying day, let’s take a look at how the current SA banks are faring with customers and rating agencies.
We compiled the results from multiple surveys, reports and indices to answer the question:
Which is the best bank in South Africa, 2019?
Earlier this month, BusinessTech published the results of its inaugural 2019 Banking Survey, which was conducted over March 2019 and drew over 1000 detailed responses.
The biggest demographic accounted for in this data was male South Africans between the ages of 18 and 40, who earn an income of R10 000 – R50 000 per month.
The survey was designed to gauge South African banking habits, service satisfaction and interest in rising digital banking platforms – such as Discovery Bank, TymeBank or Bank Zero.
According to the findings, FNB remains the most popular bank in South Africa, with over 34% of respondents making use of its accounts. Capitec, Standard Bank, Nedbank and Investec followed.
The results also revealed that only a minority of the respondents listed Bidvest Bank or Old Mutual as their primary banks.
Overall, South African banking customers are pretty satisfied with the service they receive from their banks. According to the BusinessTech survey – which asked customers to rate their overall satisfaction with their bank out of 10 – most respondents scored their banks from 7 to 9.
With regards to customer satisfaction, Investec and Capitec outperformed their competitors, scoring an overall score of 8.71 and 8.7 out of 10, respectively.
ABSA scored the lowest, with only 6.89.
It’s no surprise then that Absa customers are also the most likely to switch to another bank, with almost a third of respondents stating that they are looking to leave. This was followed by Nedbank and Standard Bank, with a quarter of customers not feeling particularly loyal.
It is also no surprise that Capitec and Investec customers are the least likely to switch. In fact, the clients of other banks who are looking to move their business over to a new bank overwhelmingly favour Capitec as their new destination.
It must also be said that around half of all clients who indicated a desire to switch banks would not choose another traditional bank, and would consider emerging digital banks instead.
Brand Finance – the global brand finance group – recently published its 2019 Global 500 Banking report, which ranks the most valuable banks in the world. Eight of these were from South Africa.
The bank’s brand value is calculated by measuring the brand’s performance on intangible measures, relative to its competitors, and factors taken into account include stakeholder equity, marketing investment, and the impact these have had on business performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, and then assigned a corresponding rating up to AAA+ similar to a credit rating.
As has been the trend for some time, US and Chinese banks have dominated the top of the list. The only non-US or Chinese bank to crack the top ten was the UK’s HSBC.
For the first time, however, Chinese banks took all four top spots this year, with the most valuable bank in the world revealed to be the Industrial and Commercial Bank of China. The ICBC’s brand value is estimated at $79.8 billion.
No SA bank made it into the top 100, with FNB retaining its 2018 position at 141 on the list. According to Brand Finance, FNB is the most valuable banking brand in the entire Africa, with a brand value of $1.7 billion.
All other banks, with the exception of Rand Merchant Bank and WesBank, dropped positions since last year. ABSA now came in at 150, from 143. Standard Bank dropped from 144 to 156. Capitec plummeted from 254 to 273.
RMB climbed from 377 to 371, and WesBank made its debut on the list at 457.
Consulta also recently released its South African Consumer Satisfaction Index (SAcsi) for the country’s top retail banks, revealing which banks have kept their customers happy and which have dropped the ball.
The annual index provides insights into SA’s big six banks – ABSA, African Bank, Capitec, FNB, Nedbank and Standard Bank – and the overall level of satisfaction of their customers.
For the sixth consecutive year, Capitec has once again topped the list with the highest overall customer satisfaction score across all banking brands.
FNB followed, also in a leader position, and Nedbank and African Bank were declared on par with the industry average for 2018. ABSA and Standard Bank, however, placed below industry average.
The Consulta Index also gives us the recommendation ratings for each brand, because while many customers may be satisfied with their bank’s performance, that doesn’t mean they will actively recommend that bank to friends or family.
It isn’t at all surprising to find that the recommendation rankings and satisfaction rankings are pretty much the same. All this really does is serve to reinforce how positively – or negatively – we as consumers see these banks.
Capitec was ranked most likely to be recommended, followed by FNB, Nedbank, African Bank and Standard Bank.
ABSA came in last place, again, well below industry standard.