BA900 – Sep 21. Standard Bank maintaining its growth momentum
- Annual growth rates in the SARB’s gross loans and advances category accelerated from 1.9% in August to 3.7% in September. Retail annual loan growth of 5.9% has remained in line with August with corporate faring considerably better (0.6% vs -3.3%), but still lags significantly. On our methodology, industry advances growth was 3.2 % YoY, 2.2% YTD and 0.6% MoM, all accelerating on the August data. Annual SARB loan growth has exceeded deposit growth (3.2%) in September, but as a ratio remains near lows.
- Corporate overdrafts (caution, it is volatile) remains the strongest growing category (+21.2% YoY), followed by residential mortgages (+7.9%), instalment sales (+5.4%) and credit cards (+4%). This is consistent with August. Foreign currency loans have declined by 12% YoY with corporate loans achieving growth of 1.1%. Personal loans is the category showing the weakest growth, -0.9% YoY. On balance secured lending is performing better.
- Standard Bank achieved the best MoM growth in September (+1.5%) resulting in it having the highest YoY growth of 7.8%. It has overtaken Absa which had a below sector growth month at 0.5%. FirstRand has reversed its negative YoY growth trend with 1.2% MoM growth, although its driven largely by corporate loans. Nedbank trails the sector with 0.6% YoY growth.
- Standard Bank is dominating market share gains over the past 12 months, with increases in all categories apart from commercial mortgages. Its increased its total share of advances by 1.1% followed by Absa at 0.5%. FirstRand has trimmed its losses from 0.6% to 0.4% and Nedbank from 0.6% to 0.5%.
- Capitec achieved 0.8% growth in personal loans, further gaining market share. Its credit card book was flat on the prior month, but it is gaining market share YoY. It remains dominant in deposit growth, up 3.5% MoM and an impressive 30% YoY. African Bank’s personal loan book grew modestly in September and remains down 6.1% YoY. It has also achieved impressive deposit growth (+41%), albeit off a low base.
- Of the majors, FirstRand continues to dominate YoY total deposit growth (+5.6%) followed by Absa (+4%). Nedbank has negative YoY growth. Retail deposit growth is well ahead of wholesale growth industry wide.
- Of the big four banks Nedbank and Standard Bank are seeing provisions growing significantly faster than advances, particularly Standard Bank where provisions have risen 30% compared to advances of 8% YoY. Industry impaired advances as a % of loans remained stable at 4.9%, considerably higher than the 4% in January 2020.
- Discovery Bank achieved 30% YoY growth in deposits (R9.6bn) and 6% in credit cards (R3.8bn), the latter not growing in September. Its credit card growth is disappointing relative to 4% industry growth. TymeBank’s deposits grew 73% to R2.6bn with negligible lending on its balance sheet.
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