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Welcome back to another DID YOU KNOW? – where we breakdown everything business and finance simply for SMEs to understand. In this three-part miniseries, we focus on the banking side of your small business so that you are well informed about how banks work and which one is best suited for no matter what business you are running.

So sit back relax and get ready to be schooled in the art of small business banking.  Knowing how to identify which bank is the right one for your business is going to take time but when done right the choice you have made will reward you long-term and that kind of thinking will benefit your business growth, development and shape it into a legacy business that will last even when you are no longer around to watch over it.

How do banks work?

A very important part of this article is that you need to understand how banks work and make money from you when you open an account with them. Let the lesson begin, I promise to give you the simplified version so that it does not go over your head and lose you with all the jargon of banking words.

When a person deposits money into their bank account the bank can then lend those funds to other people. The depositing customer gains a small amount of money in return (interest on the deposit) and the lending customer pays a larger amount of money to the bank in return (interest on the loan). To make money for itself the bank keeps the difference.

How do banks make money?

There are three main sources from which banks make money and below I have listed them for you:

Net Interest Margin – This is the difference or “net” between the interest paid to depositors and the interest received from borrowers. Interest rates are set by the South African Reserve Bank therefore,  banks pay you for depositing and lend your money out to borrowers.

Interchange – Every time you swipe a card at the store the merchant pays a small percentage of the money to the bank that issued the card, called an interchange fee.

Fees – These are the fees that your bank charges, including ATM withdrawals, overdraft facility, late payment, insufficient funds, monthly account, etc.

There you have it that is how a bank works and derives income from your money so that we can have the peace of mind that our money works for us and grow so that we do not become slaves to it as well as not being like the people of old who put it in tins under their mattress.  Thanks to technology banking makes it easier to buy and sell things, no matter what those things are.  We have easy access to our accounts and can see our money increase (or decrease) right in front of our eyes.

List of South Africa Leading Banks:

History of Standard Bank

The bank was incorporated in London on 15 October 1862 as Standard Bank of British South Africa. It was formed by a group of South African businessmen led by John Paterson. The bank started operations in 1863 in Port Elizabeth, South Africa, and soon after opening it merged with several other banks including the Commercial Bank of Port Elizabeth, the Colesberg Bank, the British Kaffrarian Bank, and the Fauresmith Bank

It was prominent in the financing and development of the diamond fields of Kimberley in 1867. In reflection of the growth of its branch network and expansion outside British controlled regions, in 1881 the bank dropped the word “British” from its title and adopted the name Standard Bank of South Africa Limited.

When gold was discovered in the Witwatersrand, the bank expanded northwards, and on 11 October 1886, the bank started doing business in a tent at Ferreira’s Camp (later to be called Johannesburg), thus becoming the first bank to open a branch on the Witwatersrand goldfields. It opened a second Johannesburg branch on 1 November 1901 along Eloff Street.

From the 1890s through the 1910s the bank opened offices across Africa, although some of them were unsustainable and subsequently had to be closed.  In 1912 it opened a branch in New York City. In 1920 it bought out the African Banking Corporation and by the mid-1950s, Standard Bank had around 600 offices in Africa.

In 1962, the bank was renamed Standard Bank Limited, and a subsidiary was registered in South Africa under the parent bank’s previous name, Standard Bank of South Africa.  In 1965, Standard Bank merged with the Bank of West Africa expanding its operations into CameroonGambiaGhanaNigeria, and Sierra Leone.

Market Share

Standard Bank Limited today holds a major share of the banking market with a cool 23.9% in numbers – that is 11.8 Million customers – making it the most popular bank in South Africa and the second most popular bank in Africa with 525 branches in South Africa which was at 629 before an announcement was made in 2019 to close 104 branches in South Africa laying off 1 200 bank employees.

Service Offering

Personal, Business and Corporate, Commercial, Foreign Currency Exchange, Insurance, Investment, Investment Management, Private and Wealth Management.

Customer Satisfaction  

The South African Customer Satisfaction Index measures a company on basic principles to get an overall percentage that is 0% to 100% with 0% being the worst and 50% above being mild, good, and excellent.  Standard Bank is placed last on the list of all the big banks in South Africa with a score of 75.3% which translates to being in the mild going onto the good category.  Remember though that The South African Customer Satisfaction Index method of calculating can be biased and obscured. Standard Bank is working on fixing their mild to good customer service level going forward but it could be a little too late for them.

Total Asset Net Worth 

Standard Bank Limited has assets to the value of $142.9 Billion under management over its entire portfolio of the areas served namely Africa, Asia, Europe, North America, and South America with a total of 54 767 employees as of 2016 financial reporting on the JSE, making it the largest bank in Africa and 44th in the world.

Account Fees

Access Account Fees Transactions % Change
Withdrawals (Native) R1.90/R100 R9.50 +2.7%
Withdrawals (Other) R9.00+R19.90/R100 R18.50 +1.4%
Withdrawals (POS) R1.40 R1.40
Deposit (ATM) R1.70/R100 R8.50 +3.0%
Debit Order (Internal) FREE
Debit Order(External) R9.50
Account Fee R5.80 +3.6%

For additional information click here:

Final Thoughts

I have not personally banked with Standard Bank Limited because I first had to look at the cost involved with having an account with them and second I believe that Standard Bank is better suited for big business that is doing a turnover of over R100 million a year, not small business starting and trying to survive the next five years but handling the financial assets of South Africas 38 000 High Net Worth Individuals.

Cost is a big factor when choosing a bank for your business because there are so many you need to take into consideration so read, research and ask tons of questions until you are blue in the face because remember you are the customer and your needs have to be met with information that adds value to your business throughout its working lifespan.

History of First National Bank

First National Bank commonly known as FNB is the oldest bank in South Africa. It traces its origins back to the Eastern triocrees Province Bank, which was formed in Grahamstown in 1838. At the time they financed the Wool export boom in the district.  By 1874, the bank had four branches at Grahamstown, Middelburg, Cradock, and Queenstown.  Due to a recession, the bank was bought out in 1874 by the Oriental Bank Corporation (OBC).  However, as a result of financial difficulties the Oriental Bank Corporation was experiencing in India, it decided to withdraw from South Africa, and thus the Bank of Africa was formed in 1879 to take over the OBC’s business in the country.

At about the same time, the government of the South African Republic desired to create a local commercial bank, due to the discovery of gold in Barberton and the Witwatersrand. The government thus created a bank through a concession agreement.

The task of the bank was to focus primarily on financing Agricultural development. A state mint was also established as part of the concession. The Nationale Bank der Zuid-Afrikaansche Republiek Beperk (National Bank of the South African Republic Limited) was registered in Pretoria in 1891 and opened for business on 5 April of the same year. After the conclusion of the Second Anglo-Boer War in 1902, the name of this bank was changed to the National Bank of South Africa Limited.

Market Share

First National Bank today holds the second spot of the banking market with a cool 21.3% in numbers, that is 7.2 million customs making it the second most popular bank in South Africa and 4th most popular in Africa with 619 branches in South Africa and 44 916 employees.

Service Offering

Personal, Business and Corporate, Commercial, Foreign Exchange, Insurance, Investment Management, Private banking, and Asset Management.

Customer Satisfaction

On the South African Customer Satisfaction Index First National Bank is placed fourth on the list of all the big banks in South Africa with a score of 79.9% so that translates to good.   They are working on creating better customer service through technology innovation and training of staff to assist the small business community going forward so that makes them a good partner for handling your business funds.

Total Asset Net Worth

First National Bank has assets to the value of $93 Billion under management over its entire portfolio of areas served in Africa mainly Botswana, Namibia, Swaziland, Lesotho, Zambia, Mozambique, Tanzania, Ghana, and Nigeria with offices in London, Guernsey, and India.

Account Fees 

FNB Gold Account Fees Transactions % Change
Withdrawal (Native) R1.90/R100 R9.50 No Change
Withdrawals (Other) R9.50+R1.90/R100 R19.00 +2.7%
Withdrawals (POS) R1.60 R1.60 No Change
Deposit (ATM) R1.00/R100 R5.00 +5.2%
Debit Order (Internal) FREE No Change
Debit Order (External) FREE No Change
Monthly Account Fees R109.00 +3.8%

For additional information click here:

Final Thoughts

I have been a customer of First National Bank and in that time their customer service over the telephone was good but depending on which branch you go to their in-branch service needs more work.  First National Bank is one of the best banks to deal with when you are starting.  As a small business owner that has made some money and would like to see it grow.  Thanks in part to the good interest that they pay on your money so that is a good plus and then they have faculties that can assist you to further grow your business by taking out structured loans that can be tailored to your business industry.

My final thoughts, overall First National Bank is a good choice when looking to opening a business bank account but also keep in mind that there is paperwork required when opening a business account with any bank in South Africa, therefore having the following documents ready makes the process go a lot faster: CIPC registration documents, ID and proof of address (when renting premises the Lease Agreement).  Once all the paperwork is done you have a bank account for your business to start trading with as well as have access to your online records for bookkeeping/accounting purposes.

We have come to the end of Part 1 of our small business banking miniseries and leave you with a bit of advice, do not rush to open up a bank account because there are so many hidden factors you need to take into consideration to make sure you have made the best decision for your businesses financial needs and strategy of growth and expansion.  Stay tuned for Part 2 and more Did You Know?

Yvette Pugin

Yvette Pugin


A force to be reckoned with: Qualified Senior Bookkeeper with 40 years experience in Administration, both in Corporate and the SME space. Having started working in the 1980’s when computers were still a dream; her experience was gained with manual systems. After working with SME Suppliers in the corporate environment, it became apparent that there is a need for not only education, but system management for SME’s.