Standard Bank, which garners the largest chunk of the credit-card market in South Africa, and First National Bank (FNB) have both managed to increase their share of the market at the expense of the country’s other major banks.
An analysis by Efficient Research of D1900 returns — which banks are required to complete and submit to the regulators at the end of each month — shows that from May last year, FNB has managed to increase its market share in the credit-card market by 3,7% and Standard Bank its share by 3,3%.
Absa and Nedbank, on the other hand, have decreased their market share by 2,7% and 3,4% respectively, while Investec has lost 0,6%.
Standard Bank garners 33% of the market, followed by FNB with 26%, Absa with 23% and Nedbank with 15%.
According to Efficient Research, the overdraft market seems to be a more competitive area of banking, with only Absa being able to grab more than 20% of the market. Absa has increased its market share over the past 12 months from 26,7% to 30,6%, with all other banks, except Nedbank (0,7%), losing out.
The largest share of overdrafts extended by Absa is to non-individuals, but the largest player in individual overdrafts is Standard Bank.
“The other loan market is dominated by FirstRand, Standard Bank and Nedbank, each with more than 20% of the market. For the strong position that Absa has in the overdraft and credit-card market, it is surprising that their share of other loans is only slightly more than that of Investec.
“What is even stranger is that Absa has more than a third of the individual other-loan market but cannot crack the 10% level for non-individuals!”
The Efficient Research analysis of the D1900 data shows that the mortgage market is dominated by Absa (31%), followed by Standard Bank (27%) and Nedbank (20%), accounting for 78% of the market. Absa’s market share comes from its dominant position in the individual mortgage market (35,8%).
Individuals are the largest takers of mortgage credit. Standard Bank holds market share in the mid-twenties percent for both individuals and non-individuals. Nedbank has the largest share in the non-individual mortgage market.
Standard Bank (2,5%) increased its market share the most over the past 12 months, while Absa (0,3%), FirstRand (0,6%) and Investec (0,5%) also increased their share. The main loser was Nedbank (1,9%) and the other smaller players (2%).
What FirstRand gives up in the mortgage sector, it makes up in the instalment sector, through its Westbank arm. Absa and Standard Bank has almost equal market share of 23% and 24% respectively.
Since May last year, the large players lost market share to the smaller banks (2,3%), while Standard Bank (1%) and FirstRand (0,3%) were also able to make gains, leaving Absa (1,5%) and Nedbank (1,9%) weaker off.
“FirstRand is unquestionably the market leader in the leasing market, dominating with 43% of the market. FirstRand was not content with being the largest player and has increased its market from 35,9% in May 2004 to the current 43%. The only other player that were able to increase its market share was Absa (2,6%) while the other dropped back significantly,” Efficient Research says.
It adds that Absa (25,3%) and Standard Bank (24,9%) are the two largest players in the credit-extension market. FirstRand follows close behind. Over the past 12 months, Nedbank and the smaller banks lost out on the credit boon, losing 1,5% and 1% respectively.
Investec held on to its market share, while Standard Bank made the most of this period increasing its market share by 1,4%.
On deposits, Efficient Research says: “Cash lent to customers need to be obtained from somewhere. The most important source of lending is deposits (by various depositors) at banks, although money is also borrowed from other financial institutions. The largest deposit-taking institutions are Standard Bank (22,8%) and Absa (22,3%).
“These two institutions also made the largest gains in market share with 1% and 1,2% increases respectively, taking market share away from the smaller players. From the credit data, one would suspect that Nedbank do not have a large market share in terms of deposits; this is, however, not true. Nedbank has 21,6% of the total deposit market share, but only 18,6% of the total credit market.” — I-Net Bridge