Standard Bank retains its status as Africa’s biggest bank, even as rival FirstRand closes in. John Everington reports.

In South Africa, the last will be first and the first last, at least when it comes to the country’s banks.

Standard Bank comfortably retains its crown as the largest lender in South Africa in The Banker’s 2022 Top 1000 World Bank ranking, coming in at number 157 overall, unchanged from last year. Yet it is Investec South Africa, the country’s fifth-largest bank, that once again has been crowned best performer, with Standard Bank coming in at fifth position for overall performance.

While the economic environment in South Africa remains extremely challenging, the country’s lenders still enjoyed a partial recovery in 2021; all seven banks in this year’s Top 1000 saw an increase in their Tier 1 capital bases, with five advancing in the ranking.

Standard Bank’s Tier 1 capital and asset base increased by 5.1% during 2021. While its asset base slipped marginally, the bank saw a 94.3% rise in pre-tax profits, thanks to improved retail lending and lower provisions. Yet while the bank remains the largest bank in Africa by both Tier 1 capital and assets, second-placed FirstRand closed the gap significantly in 2021.

FirstRand, second-largest by Tier 1 capital, posted its best-ever annual results in 2021, registering a 35.1% growth in Tier 1 capital in dollar terms for the 12 months to June 2021 (boosted by a significant strengthening of the rand during the period).

Investec — which dropped one spot in the overall rankings to 401st place — retains its position as the country’s best-performing lender thanks to high scores for operational efficiency, asset quality and liquidity. The bank’s cost-to-income ratio improved significantly from 59.61% to 51.83% during the year, while non-performing loans dropped from 2.6% to 1.9%.

FirstRand’s growth in both assets and profitability helped it rise from fourth to second place in the country’s performance rankings, with the bank also topping the table in terms of return on risk, soundness and leverage. Alongside a 91.5% rise in pre-tax profits for the 12 months to June 2021, the bank’s ratio of risk-weighted assets to total assets improved from 57.8% to 56.1%.

Absa, which remains the country’s third-largest lender by Tier 1 capital, rose from fifth to third position in performance terms, thanks to strong showings for liquidity and operational efficiency, and a cost-to-income ratio second only to FirstRand’s. Nedbank, meanwhile, slipped to fourth position in terms of performance, with solid scores for soundness and leverage counterbalanced by its scores for operational efficiency, asset quality and growth.

Absa and Nedbank registered the largest gains in pre-tax profit of the big five in 2021, with rises of 138% and 140%, respectively.

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