Business—13 Oct 2025

Capitec beats Standard Bank, FNB, Absa, and Nedbank

Thanks to its unique business model, Capitec outperformed its competitors, Standard Bank, FNB, Absa, and Nedbank, on the Johannesburg Stock Exchange (JSE) in 2025.

Michiel le Roux founded Capitec in 1997. In March 2001, it was spun off from financial services company PSG Group and listed on the JSE in February 2002.

The financial services company initially focused on one-month lending. In 2001, it had only 55 branches and 25,000 clients.

Capitec decided to move into banking services, taking on South Africa’s big four banks, Absa, FNB, Standard Bank, and Nedbank.

These four banks have dominated the South African banking sector for decades, and new entrants have struggled to break through and make their mark.

However, Capitec disrupted the market by focusing on accessibility, affordability, and customer experience.

South Africans were accustomed to high fees, complex products, and limited banking hours. Capitec challenged the status quo with a refreshing approach.

Their branches opened earlier and closed later. They offered transparent, low fees, making banking easier on the pocket.

The bank’s secret weapon was technology. Capitec embraced the digital age early, offering a user-friendly app and online platform.

This resonated with a tech-savvy generation and those priced out of traditional banking’s physical infrastructure.

It also cultivated a client-centric culture, ensuring efficient and helpful customer service. This focus on building trust and positive interactions helped them succeed.

Capitec became a big success. With 25 million clients, it is now the biggest South African bank by customer numbers and market cap.

Capitec is different

Although Capitec has significantly lower revenue and net income than the other large banks, it has the largest market cap.

Simply put, it trades at a significantly higher valuation because investors have great trust that its strong growth will continue.

Sanlam Investments’ Roy Mutooni said many people make the mistake of comparing Capitec’s share price to that of other big banks like Absa and Standard Bank.

However, looking below the surface of that comparison and drilling down into the numbers shows that Capitec’s financial makeup sets it apart from other banks.

Mutooni explained that most traditional banks’ books consist primarily of lending and a smaller portion of non-interest income.

Capitec, in comparison, derives over 50% of its revenue from non-capital-intensive, non-interest income.

“This is fantastic. It means they don’t have to hold back capital, and they can keep throwing other things at their customers,” he said.

“The customers are a captive audience who want pretty much everything, so the leverage there to the upside is significant.”

Mutooni said Capitec is more of a platform business than a bank, allowing investors to open up from a valuation perspective.

“They execute incredibly well, their returns are incredibly high. I see no reason why you should be betting against them. They haven’t put a foot wrong in a long time,” he said.