Capitec Bank Holdings have overtaken Nedbank Group and sealed their position as the fourth-largest bank in terms of market share. These findings were based on the AMPS results released this month which are based on the “main bank” population.
The results showed an increase in Capitec’s market share from 7.9% to 10.8% between January and December 2012 which was a 43% year-on-year increase for the bank among the main bank population of 22 million.
According to Charl Nel, Capitec spokesperson, the bank’s recent success showed that they are now growing market share with a much lower advertising spend.
“This indicates that our message resonates more with the market in a situation where the other players combined spend so much more to advertise their brand,” said Nel.
Since its inception 12 years ago, Capitec has focused on retail banking for individuals.
“This focus translates into the smallest of expectation gap between what we promise and what we deliver in the market. Our focus was more internal than external. In other words it was not to just increase advertising spending, but to actually go back to the basics and focus on delivering a good product, in a friendly service environment at a competitive price,” said Nel.
He added that since 2009, Capitec Bank saw accelerated growth when their simple and transparent transactional banking platform took off as an alternative to the other traditional banks’ transactional options.
“By staying focused on being a retail bank that provides banking products and services in the client’s best interest, growth will be a continued result rather than an objective,” said Nel.
Nedbank still positive about overall growth performance
Nedbank’s managing executive of client engagement, Anton De Wet said they welcomed the findings of the latest AMPS survey, which focused on “main bank” population, as an indicator of market share growth for 2012.
“Nedbank continues to grow its footprint across South Africa including the communities where we were previously not represented. As reported in the bank’s 2012 Annual Results, Nedbank Retail has grown its client base by more than 650 000 bringing its overall base to 6.1 million across the Group since 31 December 2012.
In the recent Q1 trading update released on Friday, 3 May 2013, Nedbank reiterated its earnings growth target for 2013 of greater or equal than CPI plus GDP plus 5%. This growth is on the back of more than 2million accounts being sold to new and existing clients during 2012, equating to almost 40% of our clients with two or more products,” said De Wet.
Since 2011, Nedbank has monitored the macro and micro indicators on unsecured lending and has noted an increase in consumer indebtedness. “Through its risk management practices and ensuring quality granting of credit in line with the clients’ overall affordability, Nedbank has not changed the loan size and tenor maximums since 2009, remaining one of the lowest in the industry,” said De Wet.