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 you no matter what business you are running.
Let’s recap on Part 1, if you have not read it yet go ahead and do so. We looked at how banks work as well as how they make money, we also looked at two of the six banks we listed below to see which one will be the best fit for your small business. In Part 2 we carry on with that by once again breaking down the banks for you to see their history and what makes them uniquely suited for you and your financial goals.
List of South Africa Leading Banks:
- Standard Bank
- FNB Bank
- ABSA Bank
- Nedbank
- Capitec Bank
- Mercantile Bank
- Other banks
History of ABSA Bank
ABSA was founded in 1991 through the merger of financial service providers United Bank (South Africa), the Allied Bank (South Africa), the Volkskas Bank Group, and certain interests of the Sage Group. The following year, ABSA acquired the entire shareholding of the Bankorp Group which included Trustbank, Senbank, and Bankfin. In the early years of this union, each bank operated under its own name. In 1998, they were fused into one single brand. A year later, ABSA adopted a new corporate identity and the name was changed to Absa Group Limited
In 2013, the group acquired the entire issued share capital of Barclays Africa Limited and issued 129,540,636 Consideration Shares to Barclays Africa Group Holdings Limited (a wholly-owned subsidiary of Barclays) thus increasing the shareholding of Barclays PLC to 62,3%. The Consideration Shares were listed on the JSE from the commencement of trading on 31 July 2013. The name change from “ABSA Group Limited” to “Barclays Africa Group Limited” was announced on 22 July 2013 and became effective 2 August 2013.
Market Share
ABSA Group Limited today holds the third place on the list with a cool 19.5% in numbers, that is 8.9 Million customers making it the third most popular bank in South Africa and the fifth most popular bank in Africa with a combined 1 016 branches in South Africa.
Service Offering
Banking, Financial Services, Investment Services, Home Loans, Insurance, Wealth Management, Private and Offshore banking
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 with 50% above being, mild, good and excellent but ABSA Group Limited is placed second last on the list of all the big banks in South Africa with a score of 76.8% so that translates to mild. Remember though that The South Africa Customer Satisfaction Index method of calculating can be biased and obscured. ABSA Group Limited is working on fixing its mild customer services with the advancement in technology as well as using digital marketing platforms to appeal to younger demographics that will improve its customer base to become future proof.
Total Asset Net Worth
ABSA Group Limited has total assets of R1.399 Trillion under management over its entire portfolio of areas served in Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, Tanzania, Uganda, Zambia as well as London, New York City, and Canada with a total of 40 000 SA employee.
Account Fees
| ABSA Transact Account | Fees | Transaction | % Changes |
| Withdrawal (Native) | R6.00/R1 000 | R6.00 | -7.7% |
| Withdrawal (Saswitch) | R11.50 + R2.00/R100 | R21.50 | +19.4% |
| Withdrawal (POS) | R1.00 | R1.00 | -37.5% |
| Deposit (ATN) | R2.00/R100 | R10.00 | -20.0% |
| Debit Orders (Internal) | FREE | – | – |
| Debit Orders (External) | R3.50 | – | -7.9% |
| Monthly Account Fees | R4.90 | – | -7.5% |
For additional information click here:
Final Thoughts
I currently have a home loan account with ABSA bank that I pay every month to maintain the roof over my head and because of this, I can say that ABSA bank is not the easiest to deal with when it comes to lodging simple enquiries.
The verdict is that ABSA is not the best-suited bank for small businesses at all. Their clientele is better served by helping corporations that have deep pockets and can afford the monthly fees that come with being a customer. Overall ABSA is a no-no but remember that is our honest option of the matter.
History of Nedbank
The bank was founded in 1888 in Amsterdam as the Nederlandsche Bank en Credietvereeniging voor Zuid-Afrika (“Dutch Bank and Credit Union for South Africa”). In the same year, the bank opened an office in Church Street, Pretoria, South Africa. In 1903, the company was renamed Nederlandsche Bank voor Zuid-Afrika (“Dutch Bank for South Africa”). In 1906, the bank expanded and an office in London was opened. The bank split in 1951, renaming its South African counterpart as Nederlandse Bank in Suid-Afrika/Netherlands Bank of South Africa (NBSA). In 1969, the number of South African shareholders increased significantly and the company became 100% South African-owned after the Bank Mees and Hope sold 20% of its shares. The South African counterpart was completely independent. The Dutch counterpart of the bank no longer exists. Syfrets SA and Boland Bank were listed on the JSE in 1969. In 1971, NBSA changed its name to Nedbank. The merger of Syfrets SA, Union Acceptances, and Nedbank in 1973 formed the Nedbank Group. In 1986, Old Mutual became the major shareholder (53%) of Nedbank.
In 1992, Syfrets, UAL Merchant Bank, and Nedbank Investment Bank Division merged to become Nedcor Investment Bank (NIB). Old Mutual, Nedcor’s holding company, was demutualised and listed on the London Stock Exchange in 1999. It became a constituent of the FTSE 100 Index. Nedcor and Old Mutual joined in an offshore private banking venture and acquired the Isle of Man and Jersey private banking business of Robert Fleming & Co. in 2001.
The new Nedcor Group was formed on 1 January 2003, combining Nedcor, BoE, Nedcor Investment Bank, and Cape of Good Hope Bank into one legal entity. The Nedcor Group was renamed the Nedbank Group on 6 May 2005. As part of the managed separation, on 15 October 2018, Old Mutual reduced its shareholding in Nedbank Group to 19.9%.
Market Share
Nedbank Group today holds fourth place on the list with a cool 17.8% in numbers that is 7.5 Million customers making it the fourth most popular bank in South Africa and with a combined 100 branches in South Africa.
Service Offering
Personal, Business and Corporate, Commercial, Investment Management, and Offshore Banking.
Customer Satisfaction
The South African Customer Satisfaction Index measures Nedbank Group at third on the list of all the big banks in South Africa with a score of 80.2% so that translates to good.Nedbank Group is working on advancement in technology as well as using digital marketing platforms to appeal to younger demographics that will improve its customer base to become future proof.
Total Asset Net Worth
Nedbank Group has total assets of R1.04 Trillion under management over its entire portfolio of areas served Eswatini, Lesotho, Malawi, Mozambique, Namibia, Zimbabwe, Angola, Kenya, Guernsey, Isle of Man, Jersey, United Kingdom, and the United Arab Emirates with a global market capitalisation of approximately $9.1 billion and a total of 31 277 SA employees.
Account Fees
| Nedbank Savvy Account | Fees | Transaction | % Changes |
| Withdrawal (Native) | R2.00/R100 | R10.00 | – |
| Withdrawal (Other) | R10.00 + R2.00/R100 | R20.00 | +11.1% |
| Withdrawal (POS) | FREE | FREE | – |
| Deposit (ATM) | FREE | FREE | -100% |
| Debit Order (Internal) | FREE | – | – |
| Debit Order (external) | FREE | – | – |
| Monthly Account Fee | R115.00 | – | +4.5% |
For additional information click here:
Final Thoughts
Nedbank is a bank I would highly recommend using as a business bank when starting because as you can see their fee structure is ideally placed for small business owners. Their customer service is in my opinion top-notch as well as visiting a branch the employees are helpful and knowledgeable about their service offering and can answer any general questions you may have that just popped-up into your head.
The verdict is this, definitely use Nedbank as your business banking partner but it is not all rosy. Their website is not really user friendly but it gets the job done but you will sending time calling the call centre to ask for assistance when navigating the site and then there is the mobile app that can be very useful but in my opinion, we should not be using our phones when transacting with our funds because South Africa has the highest crime rate and cellphone is one of the primary items stolen so do not do mobile banking and then there is the hacking aspect that can play a contributing factor to why you should not do mobile banking. Overall Nedbank is one hell of a bank for entrepreneurs starting a new business to use to grow and learn. We end Part 2 off knowing that you have a better idea of who ABSA and Nedbank services in the South African market as well as continuing our deep dive into which bank is the right one for you. In Part 3 we conclude our final thoughts with a simple YES or NO table which highlights the best bank for your small business to use going forward or possibly change over to if you find that this miniseries has added value and given you a better understanding. Stay tuned for Part 3 until then keep safe.
Yvette Pugin
Contributor
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.