Capitec grabs the limelight from its bigger competitors

CAPITEC, South Africa’s youngest bank, is the best in the country, based on the inaugural Business Times Intellidex Bank of the Year survey.

This is the first independent survey of its sort, polling 1 021 customers for their views on which banks provide the best service in transactional accounts, home loans, car finance and other products.

That Capitec outperformed larger rivals with bigger product portfolios bears testimony to what its executive, Carl Fischer, described as a simple formula: “Simplicity plus transparency gives the client control.”

The Stellenbosch-based bank, which opened its doors only in 2001, won on the basis that its average scores for each of the products it provides are higher than those of other banks.

First National Bank (FNB) came in second, followed by Nedbank and then Standard Bank.

What will surprise many is that Absa, now trading under the banner of Barclays Africa, came last, a blow to the bank that for years was the largest retail bank in the country.

One customer described why he had switched to Capitec and how he could not be happier.

“When I opened my account the branch manager came and shook my hand. It sounds trite and retro, but he also shook the hands of some old tatas who were opening accounts. I liked that a lot,” he said.

“Capitec are man-on-thestreet friendly, and not puffed up blowing their own trumpet and then not living up to what they promise,” another said

The other banks — particularly Absa and Standard Bank — came in for a hammering, with high fees, poor service and lamentable communication being the commonest gripes.

“I never, and I mean never, hear from them,” said one customer. Another customer said: “Compared with Absa, who buggered me around and

“I was desperate to

get away from Absa

Bank”

ripped me off for many, many years, FNB is like paradise.”

Investec scored highly from customers too, but was excluded from the mainstream bank account category, because it has strict eligibility criteria.

However, had Investec been included in the overall bank of the year category, it would have pipped FNB, but still narrowly lost out to Capitec.

The views of bank customers was revealing, however, providing a barometer of consumer sentiment towards banks and revealing the real reasons why people open and close accounts.

One person opened an account with a specific bank only because “a personal banker came to my office. I was desperate to get away from Absa.”

Another said that it was “the only bank in the town where I worked”.

It was clear, however, that bank marketing played a big role too. “The campaign by them was very visible,” said one person. Another said: “I remembered they had great advertising.”

Customer service was important too.

One customer cited “the quality of staff, versus the idiots in the other banks” for switching to a specific bank, while another cited the fact that a bank “tells me how much it costs me to bank with them every month”.

The findings of this inaugural award confirm what is happening on the streets. Every month, Capitec signs up 100 000 new customers — a trajectory that has showed no signs of slowing.

This year, Capitec plans to add another 55 branches to its countrywide network of 630.

“It’s a pretty darn good achievement to grow at a rate similar to that of the big guys,” said Fischer.

Capitec wants to be the largest retail bank by 2020 — setting its sights on a 25% market share. As it stands, Capitec has 12.7% of the market,

“Compared with Absa,

who buggered me

around and ripped

me off for many,

many years, FNB is

like paradise”

according to AMPS figures, an increase from the 9.2% of 2012.

The limitation of the Capitec group, which grew out of Jannie Mouton’s PSG stable, is that it does not provide credit cards, car loans or home loans, like its larger rivals.

But Fisher said that Capitec was “investigating” models on how to do this.

As one survey respondent said: “As soon as Capitec offers credit card services and international transfer options, there would really not be any reason to bank with any other institution.”

For this reason, FNB was adjudged to have the best “comprehensive bank” offering.

This survey comes at a tough time for banks, especially the banks that are exposed to the unsecured lending market, including Capitec and its rival African Bank.

The steep rise in bad loans among the poorest South Africans has put stress on these banks, leading analysts to question whether Capitec’s lending has been as prudent as that of the others. But Fischer brushes this aside, saying his bank uses conservative lending criteria.

“We have not done badly at all given the present state of the market. Things are tough, but we are comfortable that we are on top of it, and it’s not running away with us,” he said.

The findings also accord with those of the SA Customer Satisfaction index, released earlier this week.

The index found Capitec was the best performer with a score of 81.5 out of 100, and had increased by a statistically-significant 3.2% in 2012. Overall, Capitec’s score was 7.8% above the industry average.