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Business Banking
South Africa

Business Banking South Africa operates a well-defined coverage model based on specific customer value propositions aligned to customer and client needs, and range from direct interactions via multi-channel interfaces such as electronic banking, to a dedicated relationship-based model. Enterprise customers are served predominantly through our branches while commercial customers are served through a relationship-based model, where dedicated sales and service teams provide customised solutions. The relationship-based model includes a sector overlay focusing on the primary sectors of agriculture, public sector, wholesale, retail and franchising.

This is a summary extract from our segment performance reporting. For the full segmental analysis, see our 2015 financial results booklet.


  • Headline earnings increased 5% to R2 175m (2014: R2 069m) driven by continued improvement in the performance of the underlying businesses, with a 5% growth in non-interest income.
  • Cheque account fee income and electronic banking fee income grew 14% and 10% respectively.
  • Gross loans and advances to customers, excluding commercial property finance, increased 7% with growth in term loans (15%) and agriculture (9%).
  • Deposits due to customers grew 9% to R110bn (2014: R101bn), mainly due to increasing investment products and fixed deposits.
  • Return on risk-weighted assets improved 3.08% (2014: 2.89%).


  • The commercial property finance book declined by 2%, in spite of a 28% increase in new payouts.
  • Earnings momentum slowed in the second half of the year.
  • Pressure on both advance and deposit margins. The reduction in the overall deposit margin was impacted by customers moving to lower margin deposit products.
  • Transactional revenue was impacted by customer migration to cash processing centres and lower cost digital channels.
  • Cheque payment volumes continue declining in line with industry trends.
  • Customer attrition continued although at a reducing rate.
  • Agricultural customers have been affected by the drought. We have proactively engaged them in managing their risks. Our agricultural loan book remains well diversified which helps to absorb financial risks emanating from the ongoing drought.

Operating environment

The following factors had a key influence on our operations in 2015:

  • Global economic growth slowed to 3.1% and domestic economic growth slowed to below 1.5%, impacted by further commodity price drops, electricity supply shortages and decreased business confidence.
  • Investor confidence was impacted by rising interest rates (a total of 50 basis points in the second half of the year) with further increases expected.
  • Transactional income decreases as the industry continues to reduce the use of cheques and customers migrate from traditional branches to cash processing centres and digital transacting platforms.

Business performance

Business Banking South Africa remains committed to providing relevant solutions to customers’ needs and improving operational effectiveness to retain existing and attract new customers. Enhanced electronic banking solutions, combined with an overall digitisation strategy, strengthened the electronic customer value proposition and remain key to customer growth.

Our growth momentum is further evident through:

  • refinement of both the electronic sales platform and automated credit scoring system;
  • development of an instant business account opening process via self-service digital channels;
  • the launch of an initiative that focuses on new-to-bank customer relationships;
  • enhancement of our self-service cash product offering; and
  • recognition in the form of an award for Best SME Bank in South Africa by Capital Finance International.

Overall customer numbers decreased 1.7% (at a slower rate than 2014) mainly in the enterprise segment, while our commercial segment’s rate of attrition stabilised. Despite inflationary pressures and increased investment in relationship managers, operating expense growth was contained.

Looking ahead

We remain deposit-led, transactionally-solutioned, and focused on developing long-term banking relationships with our existing and new customers. We continue to build on our momentum with specific focus on:

  • service excellence, by increasing focus on customer experience, a competitive product offering in the agricultural sector, faster credit cycle turnaround times, introducing a focused call centre capability and enhancing customers’ experience by assisting in their transition to electronic mediums;
  • customer propositions, including digitisation, through further refinement of the electronic sales platform initiative, increasing focus on managing the end-to-end cash value chain, optimising our insurance product offering and increasing the penetration of these products, and a focus on a customer-centric culture; and
  • our people, by continuing to invest in relationship managers’ skills and proficiency to embed a better approach to customer relationships.