GOVERNANCE WATCH
By InsidEntity Editorial Desk · Oct 8, 2026 · 9 min read
8 October 2026
The short version
Market valuation, financial performance and governance are three different lenses, and South Africa’s six listed banks show that none of them can stand in for the others. This InsidEntity analysis uses September 2026 data: share prices on 24 September 2026 and each bank’s latest audited annual results.
On price to book (share price divided by each bank’s reported net asset value per share), the JSE values Capitec at 8.7 times and Investec at 0.95 times. InsidEntity’s Company Risk Rating (CRR) puts the banks in a different order: Nedbank leads at 4.34, while Capitec, the highest-valued, sits in the middle at 3.95.
Shareholders in the sector have generally done well over the period covered. Since 3 January 2025, share prices are up between 3.5% (Nedbank) and 41.9% (Capitec), before dividends. Earnings are more mixed: Nedbank and FirstRand reported lower profit for the year under IFRS, though Nedbank’s headline earnings, which exclude once-off items, still rose. Nedbank also grew net interest income more slowly than inflation.
The Public Investment Corporation, on behalf of the GEPF, is a disclosed holder of between 13.8% and 16.7% in each of the six. And as at 7 October 2026, none of the six had completed the quarterly questions needed for an InsidEntity Health Status Rating.
What the market pays
Capitec and Standard Bank have been the clear winners for shareholders since January 2025, with price appreciation plus the latest annual dividend equivalent to about 44% for each. On the same basis Nedbank has lagged at about 11%.
The analysis covers South Africa’s six largest JSE-listed banking groups, using each group’s latest audited financial year and share prices on 24 September 2026.
| Bank | Financial year-end | Share price 24 Sep 2026 (R) | Price growth since 3 Jan 2025 | Dividend return on Jan 2025 price | P/E (times) |
|---|---|---|---|---|---|
| Capitec | Feb 2026 | 4,451.56 | 41.9% | 2.5% | 30.5 |
| Standard Bank | Dec 2025 | 307.38 | 36.7% | 7.5% | 10.2 |
| FirstRand | Jun 2026 | 92.91 | 20.4% | 7.0% | 14.5 |
| Absa | Dec 2025 | 221.11 | 15.7% | 8.6% | 8.3 |
| Investec | Mar 2026 | 136.28 | 8.6% | 6.9% | 7.8 |
| Nedbank | Dec 2025 | 295.88 | 3.5% | 7.5% | 17.6 (8.0 on HEPS) |
Source: JSE closing prices on 3 January 2025 and 24 September 2026; each bank’s latest declared annual dividend; InsidEntity calculations.
Dividend return is the latest declared annual dividend divided by the 3 January 2025 share price. Absa paid the highest yield on that basis (8.6%); Capitec the lowest (2.5%), because its dividend is small relative to its share price.
Nedbank’s P/E of 17.6 is distorted by the sharp fall in its basic earnings. Its basic earnings per share fell 53% to 1,681 cents, but headline earnings per share, which strip out once-off items, rose 2% to 3,706 cents. On headline earnings Nedbank trades at 8.0 times, in line with Absa.
What the banks are earning
Capitec is the smallest bank by assets but grew fastest: net interest income up 19.3% and profit up 22.5%. Nedbank and FirstRand went the other way, with reported IFRS profit down 49.1% and 13.0%.
| Bank | Total assets (R bn) | Deposits lent out | Impairments as % of loans | Reported profit as % of NII | NII growth | Reported profit growth |
|---|---|---|---|---|---|---|
| Standard Bank | 3,621 | 73.0% | 0.83% | 53.6% | 4.4% | 12.9% |
| FirstRand | 2,743 | 79.9% | 0.94% | 50.2% | 5.4% | −13.0% |
| Absa | 2,239 | 77.6% | 0.93% | 34.6% | 4.0% | 2.8% |
| Nedbank | 1,559 | 78.9% | 0.64% | 21.9% | 2.6% | −49.1% |
| Investec | 729 | 71.9% | 0.16% | 62.6% | 5.2% | 6.3% |
| Capitec | 263 | 54.8% | 9.61% | 69.9% | 19.3% | 22.5% |
Reported profit is profit for the year after tax under IFRS. It includes once-off items, so it can differ sharply from headline earnings, which the banks also publish and which we use where noted. Investec’s row is for Investec Limited, the South African entity of the dual-listed group.
Source: each bank’s latest audited annual results; South Africa’s 2025 CPI of 3.2%.
Four things stand out.
- Capitec’s model costs more in bad debt. Its impairment charge equals 9.6% of loans, against under 1% at the other five. That gap reflects its unsecured retail lending model, so it is not a like-for-like measure of credit quality. It lends only 55% of deposits, against 72% to 80% elsewhere, and its reported profit was equivalent to 69.9% of net interest income.
- Investec runs the cleanest loan book. Impairments are 0.16% of loans, the lowest of the six, and its reported profit was equivalent to 62.6% of net interest income.
- Nedbank is the outlier on earnings. Net interest income grew 2.6%, below South Africa’s 2025 inflation rate of 3.2%, so it shrank in real terms. Reported profit kept only 22% of net interest income, the lowest ratio in the group. Headline earnings, which exclude once-off items, still rose 2% to R17.2bn.
- Absa is the middle of the pack. Net interest income growth of 4.0% barely beat inflation, and profit grew 2.8%, a real decline.
What governance ratings see
Ranked by price to book, the banks fall in a very different order from their CRR. The three banks with the highest CRR (Nedbank 4.34, Absa 4.32, Capitec 3.95) are spread across the valuation range, and the two highest-valued after Capitec, FirstRand and Standard Bank, sit in the lower half on governance.
| Bank | Price to book (times) | Company Risk Rating | Financial Stability Rating |
|---|---|---|---|
| Capitec | 8.7 | 3.95 | 4.0 |
| FirstRand | 2.4 | 3.34 | 4.0 |
| Standard Bank | 1.9 | 3.88 | 4.0 |
| Nedbank | 1.2 | 4.34 | 3.7 |
| Absa | 1.1 | 4.32 | 4.3 |
| Investec | 0.95 | 3.24 | 3.7 |
Source: JSE closing prices on 24 September 2026; each bank’s net asset value per share; InsidEntity platform ratings: CRR as at 8 October 2026, FSR as at 24 September 2026.
Investec is the one bank at the bottom on both valuation and governance. That is an observation across six banks, not evidence that the market prices governance. It is the only bank priced below its net asset value (0.95 times), and it carries the lowest CRR of the six (3.24) and the joint-lowest Financial Stability Rating (FSR 3.7). Absa is the most consistent bank on all three measures: priced close to book, second on CRR and the only FSR above 4.
Nedbank is the reverse case. Its board and audit structure score best in the group, but its FSR of 3.7 is joint-lowest. Its core business held up, with headline earnings up 2%, but it grew more slowly than its peers, while its shares trade well below Capitec and FirstRand on price to book.
| Bank | Shareholders with 5% or more | Combined | Auditors |
|---|---|---|---|
| Investec | PIC/GEPF 15.2%, Allan Gray 12.8%, IGL Share Scheme 8.0%, Investec 2002 Share Trust 5.8% | 41.8% | Deloitte / PwC |
| Standard Bank | ICBC 19.7%, PIC/GEPF 14.4% | 34.1% | EY / PwC |
| Nedbank | PIC/GEPF 14.9%, Allan Gray 9.9%, BlackRock 5.2% | 30.0% | KPMG / EY |
| Capitec | PIC/GEPF 15.8%, Kalander Trust 6.4%, JF Mouton Familie Trust 6.1% | 28.2% | KPMG / Deloitte |
| Absa | PIC/GEPF 13.8%, Newshelf 1405 7.0% | 20.8% | KPMG / PwC |
| FirstRand | PIC/GEPF 16.7% | 16.7% | KPMG / EY |
Every bank runs a joint audit. ICBC’s 19.7% of Standard Bank sits just under the 20% level InsidEntity treats as material influence, and Investec has the most concentrated register, with four holders controlling 41.8%. The PIC’s 14% to 17% stake in every bank makes it the one shareholder whose voting choices reach across the whole listed sector.
Where valuation and performance meet
Return on equity tracks the valuation order more closely than governance does. The three banks with the highest ROE in their latest results (Capitec 31%, FirstRand 24.9% on continuing operations, Standard Bank 19.3%) are the same three the market values most highly against book.
Source: each bank’s latest audited annual results; InsidEntity calculations. FirstRand’s return on equity is for continuing operations.
Investec closes the ranking on both measures, with the lowest ROE (13.6%) and the only price below book. Absa and Nedbank earn almost the same return (15.0% and 15.4%) and are priced almost the same.
Cost control follows the same pattern. Capitec spends 39 cents to earn every rand of income, FirstRand 48.0 cents and Standard Bank 50.2 cents. Investec (52.9%), Absa (53.8%) and Nedbank (57.8%) run the highest cost-to-income ratios.
Nedbank’s earnings gap is explained by its own results. Basic earnings per share fell 53%, while headline earnings per share rose 2%. Nedbank points to the sale of its 21% stake in Ecobank Transnational (ETI) and a once-off settlement with Transnet as the year’s main moving parts.
FirstRand’s year was shaped by its UK exit. A R12bn provision for UK motor finance redress cut reported earnings, and its UK bank Aldermore is now a discontinued operation. Basic earnings per share fell 14% to 642.1 cents and headline earnings fell 5% to R39.7bn. Its 24.9% ROE and 48.0% cost-to-income ratio are for continuing operations. Including the UK provision, its group ROE was 18.3%.
What it means
A share price measures what the market expects. InsidEntity’s ratings measure how a company is governed and how stable its finances have been. The six banks show why investors, depositors and boards need both.
- For investors: Capitec’s 8.7 times premium prices in continued fast growth. Its governance rating (3.95) is solid but not the sector’s best, and its bad-debt charge is far higher than its peers’. Investec, the only bank priced below book, also has the lowest CRR and the lowest ROE of the six.
- For depositors: every bank sits at 3.7 or above on the FSR, inside the Good to Excellent bands. The sector is not showing financial distress.
- For boards: Nedbank shows that a strong CRR does not protect earnings on its own, and Investec sits low on both valuation and governance measures. The quickest gain open to all six is the Health Status Rating, which, as at 7 October 2026, stays “Unknown” until each bank answers InsidEntity’s quarterly questions.
- For everyone: the backdrop is tough. South Africa’s Economic Sustainability Rating (ESR) stands at 147.8, in the Inefficient band and 3.2 points below the 151 line where the Unsustainable band begins on InsidEntity’s own gauge, where higher scores mean greater economic pressure. The ESR (inflation rate multiplied by unemployment rate) is InsidEntity’s leading indicator, not an external economic threshold. It gives the macroeconomic context the banks operate in; it is not a forecast of bank credit losses.
What’s your bank’s number? See each bank’s full Company Risk Rating and Financial Stability Rating on InsidEntity: Capitec, FirstRand, Standard Bank, Nedbank, Absa, Investec.
Know Your Entity.
Method and sources
Figures come from each group’s latest audited annual results (year-ends shown in the first table), JSE closing prices on 3 January 2025 and 24 September 2026, and InsidEntity platform ratings (CRR as at 8 October 2026; FSR as at 24 September 2026; HSR as at 7 October 2026). Price to book is the 24 September 2026 share price divided by net asset value per ordinary share. Absa (20,802 cents), Nedbank (24,956 cents) and Capitec (51,404 cents) report that figure directly. Investec’s NAV of 636.6 pence is converted at R22.58 to the pound, the rate implied in its results; FirstRand’s uses its reported NAV per ordinary share of 3,888.1 cents; Standard Bank’s is ordinary shareholders’ equity of R264.2bn divided by 1,622.9 million shares, about 16,277 cents. Investec is a dual-listed group: its total assets, deposits, loans, net interest income, impairment charge and profit are those of Investec Limited, the JSE-listed South African entity, while its net asset value per share, earnings per share and return on equity are those of the combined Investec group. Profit as % of NII is profit after tax divided by net interest income. Combined shareholdings are added before rounding. Inflation is South Africa’s 2025 CPI of 3.2%. Return on equity, cost-to-income and impairment ratios also reflect each bank’s business mix, so they compare outcomes rather than like-for-like quality.
The CRR, FSR, HSR and ESR are InsidEntity’s own analytical ratings, built on its published methodology. They are not credit ratings or regulatory assessments. All ratings and market data are a dated snapshot.
Independent research. Not financial advice. No allegation of wrongdoing is made against any individual or entity named.
Know more. Risk less. Decide better.
Sources: InsidEntity, SA Listed Banks analysis (September 2026); InsidEntity platform (CRR, FSR, HSR, ESR); company results: Capitec FY2026 summary, Nedbank 2025 results highlights, Standard Bank 2025 results SENS, Standard Bank 2025 results overview, Absa FY2025 results presentation, Absa 2025 Integrated Report for its shareholders of 5% or more, Investec FY2026 final results, FirstRand FY2026 results presentation, FirstRand FY2026 annual financial statements.