With a new chief executive officer (CEO), Graham Lee, last South Africa’s biggest bank by customer numbers, Capitec overtook FirstRand to become Africa’s most valuable bank.
Capitec was founded by Michiel le Roux in 1997, three years after the election of Nelson Mandela as the first black president of a democratic South Africa. The bank was spun off from financial services company PSG Group in March 2001 and listed on the Johannesburg Stock Exchange 11 months later.
Since then, the lender has transformed itself into a financial-services company with more than 24.1 million personal and business clients as of the end of February.
Majority’s favourite bank, Capitec has reported record profits for four straight years. Its shares have jumped about 16% since the start of the year, outstripping peers on the FTSE/JSE Africa Bank Index, which climbed 3.6% over the period. FirstRand is down 1.3%.
News24 reported Capitec’s stock has surged 213.189% since its listing on 18 February 2002. Under former CEO Gerrie Fourie, the bank’s focus on low-income depositors and unsecured lending helped lure customers.
“Capitec’s growth shows what a company can do by solving a real customer problem, with a decisive management team and agile technology,” Avior Capital Markets analyst Adrienne Damant said in response to questions from Bloomberg. It has created a trusted brand and leveraged its large client base to consistently deliver better earnings growth and returns than its peers,” she said.
Still, Capitec is facing intensifying competition as rivals including Nedbank Group and new lender OM Bank seek to tap the low-income market. And while Capitec’s market value has jumped to R424 billion, its total assets continue to lag those of its competitors.
However, as of Monday morning, 1 September, FirstRand quickly reclaimed the number one spot.
Market capitalisation is the total value of a company’s shares on the stock market. This shows how big or valuable the market thinks the company is. It is calculated by multiplying the share price by the total number of outstanding shares.
FirstRand Group is the parent company of banks such as FNB, Rand Merchant Bank, WesBank, and Ashburton Investments. The bank group’s CEO is Mary Vilakazi, making it the only top bank in the country with a woman at the helm.
FirstRand’s market capitalisation sits at R429 billion, making it the most valuable bank on the continent. When it comes to assets, it holds the second spot, with assets worth R2.5 trillion.
A bank’s total assets include everything it owns or controls that has economic value. This can include investments, property, and equipment, among others.
Capitec market capitalisation was at R412 billion, putting the bank in the third spot. Capitec is the smallest bank in the country in terms of assets. Its assets are worth R239 billion, with the rest of the country’s top banks having assets worth trillions of rands.
