In this second post in our series concerning banking in Africa, let’s focus on South African banks. This could be a great play on the growth of the rest of Africa, because most South African banks have as a large part of their strategy to expand in sub-Saharan and/or the rest of Africa, in commercial and/or retail banking.
We’ve discussed banking in Africa previously, for example here and here. While there are some analysts who believe that only one bank in South Africa is poised to do well, a bank ratings expert, headquartered in London, says that:
“Based on all of the banks we have rated so far, which are about 250 around the world, the South African banks as a whole are distinctly the best in the world. There is no two ways about it.”
I think it has to do with several things. First of all they score very well on the financial side of our ratings criteria – that’s stuff like capital, liquidity and all the financial ratios that are very important in assessing banks. But they also score very well on the so-called qualitative criteria, which is where we look at things like strategy, like culture, like living the brand promise. They’re actually extremely impressive banks – that’s taking the South Africa banks as a whole. We looked at the big five, including Capitec.”
We still need to do our “homework”. They looked at the “big five” (Capitec (CPI|JSE), Barclays Africa (BGA|JSE), FirstRand (FANDY|OTC MKTS.; FSR|JSE), Standard Bank (SGBLY|OTC MKTS.; SBK|JSE), and Nedbank (NED|JSE)), but, to reiterate, he said that “…South African banks as a whole are distinctly the best in the world.”
Africa Investment Report owns shares in iShares MSCI South Africa, which has holdings (owns shares) in Standard Bank and FirstRand.
Find out where we’re going with these Africa investment ideas and concepts by signing up for our free newsletter! Sign up in the box to the right, and as a gift for doing so, get our FREE report: “How to Profit From Africa’s Growth Without Leaving Home”. So what are you waiting for? Do it right now!
“Capitec, Barclays Africa and Atlas Mara: Thoughts From a Bank Ratings Expert”: http://www.howwemadeitinafrica.com/capitec-barclays-africa-atlas-mara-thoughts-bank-ratings-expert/55269/