South African Business 2018 edition

OVERVIEW
Banking and financial services
New banks and new stock exchanges are adding to South Africans’ choices.
SECTOR INSIGHT
Tyme has the first new
banking licence since 1999.
South Africa’s banking and financial services sector is experiencing
a surge of innovation with several new banking
licences expected to be granted before the end of 2018.
First to get over the line in 2017 was Tyme, which stands
for Take Your Money Everywhere and refers to the bank’s digital
origins and its plans for the future which do not involve opening a
branch network. Commonweath Bank of Australia bought a controlling
share of Tyme when it was a loans company and African Rainbow
Capital is the venture’s BEE partner. The banking licence is the first to
be issued since Capitec was granted a licence by the South African
Reserve Bank in 1999.
Capitec has since gone on to become a major player on the
South African retail banking scene. It now merits inclusion in a new
“Big Five”, with Standard Bank, Absa, FNB and Nedbank. In terms of
assets, the five biggest banks are Standard Bank, FirstRand (which
owns FNB), Absa (which is part of Barclays Group Africa), Nedbank
and Investec. According to the Reserve Bank, this group had 89% of
market share in 2015.
Merchant banking and investment
banking are the most competitive
sectors with companies
such as BoE Private Clients, Rand
Merchant Bank and Investec
prominent.
There are 40 international
banks with offices in South Africa,
including Bank of China, Standard
Chartered, JP Morgan Chase, HSBC
and Citibank.
Afgri, South Africa’s largest agricultural
company which already
offers financial services, bought
the South African Bank of Athens
in 2017. The bank was purchased
from the National Bank of Greece
Group and is still subject to regulatory
approval. Most South African
agricultural companies have
financial divisions.
Other applicants for new banking
licences are Discovery and Post
Bank, a division of the South African
Post Office. Discovery is already a
giant on the JSE (market value of
R83-billion) with a wide range of
products and services that give it
access to millions of customers. Life
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