OVERVIEW Banking and
OVERVIEW Banking and financial services New banks are offering more choices. SECTOR INSIGHT Africa’s biggest bank has Port Elizabeth roots. Africa’s biggest bank made its start in Port Elizabeth. Entrepreneur John Paterson launched Standard Bank in London in 1862 and opened its first branch in Port Elizabeth in 1863. The initial spark was the discovery of diamonds in Kimberley but gold prospectors soon needed financing too, so 1866 saw the opening of a branch in Johannesburg. The bank continues to have a presence in Govan Mbeki Avenue (previously Main Street) and is active in the province. The financial and business services sector is responsible of 19.2% of the Eastern Cape’s Gross Domestic Product (StatsSA). The sector provides employment for 141 000 people. Agricultural finance is an important factor in the Eastern Cape. Production loans, vehicle financing and revolving credit plans all play an important role in keeping farmers and agro-processors in business. Despite a bad experience with a mutual bank that was looted in Limpopo, the appetite for mutual banks is strong, given the nature of the South African market. The Young Women in Business Network (YWBN) received approval in March 2021 for a mutual bank licence. Savings and business loans will be offered, and the public will have a chance to buy shares later in the year. Bank Zero will use the mutual model while other new entrants such as TymeBank (free transactional accounts) and Discovery Bank (which applies the behavioural model it uses in its health business to reward good financial behaviour) have introduced interesting innovations to the South African banking sector. ONLINE RESOURCES Auditor-General of South Africa: www.agsa.co.za Financial Sector Conduct Authority: www.fsca.co.za South African Institute for Chartered Accountants: www.saica.co.za South African Reserve Bank: www.resbank.co.za Tyme stands for Take Your Money Everywhere and refers to the bank not having a branch network. Perhaps the lockdown encouraged customers to think in digital terms because Tyme reported in October 2020 that it had 2.4-million customers, up from 1.4-million at the end of March. A 400% increase in the use of services such as airtime and electricity purchases was also noted. Discovery Bank officially launched in March 2019 and is experiencing rapid growth with deposits of R3.7-billion. Another relatively new bank is Capitec, which is steadily increasing its customer base by providing banking for business and individual customers in what it describes as a simple manner. It has branches in the small Eastern Cape towns of Bizana and Lusikisiki. In May 2020, investment holding company PSG announced that it would reduce its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares. Capitec merits inclusion in a new retail “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 (part of Barclays Group Africa), Nedbank and Investec. ■ EASTERN CAPE BUSINESS 2021/22 34
Standard Bank’s new campaign celebrates triumphant South African business South Africa banks on business. Business banks on us. demonstrate how they have partnered with them to help them grow. The bank will be delving into the remarkable histories of the businesses, celebrating their resilience, and honouring the many ways that they have positively changed, and continue to change, the lives of the people who work for them and the communities in which they operate. Small and medium enterprises are the lifeblood of Africa. They play a crucial role in its growth, providing employment, stoking new economies, and connecting the continent to the rest of the world. In South Africa they are the heartbeat of our GDP. SMEs drive real growth, and it is estimated that they provide employment to roughly 47% of the workforce, with their total economic output accounting for around 20% of GDP. These businesses are owned by our neighbours, family and friends and they touch our lives every day, often in small ways but sometimes in grand, immeasurable ways. The impact that these businesses have, makes for incredible stories, and it is these stories of tangible, sustainable growth that form part of Standard Bank’s new business banking marketing campaign. The campaign tagline, South Africa banks on business. Business banks on us speaks to real stories, about real business, and the real, life-changing impact they have on people’s lives. Remarkable stories Standard Bank has collaborated with some of their business clients, to tell their stories and to These stories will showcase how these businesses employ people, empowering them and their families, and aiding in their children getting an education. They will highlight how businesses provide the impetus for growth and help to take families and communities out of poverty, and how they drive economic activity and act to combat socio-economic challenges. In the coming weeks, these remarkable stories will be unpacked across billboards, in print, online, on radio,and on television. In times of uncertainty, businesses want partners that bring them certainty, reliability and excellence when it comes to service. But, importantly, they also deserve partners who understand their needs and who are committed to helping them achieve their goals. Standard Bank supports many of these businesses with banking solutions, trade assistance, market access, transcontinental networking platforms and more. Their Business Banking offering is an ecosystem of innovative products designed to meet even the most complex needs. They cut across sectors and look to provide clients with access to funding, expertise and advice, digital integration, trade solutions and insurance coverage. Every day Standard Bank partners with businesses to help them unlock their growth, no matter the economic climate. That is why, South Africa banks on business. Business banks on us. ■
