Battle for affluent clients heats up as Investec sets eyes on top earners

South African banks are increasingly going head-to-head for affluent clients as competition for the fast-growing segment heats up. In the process, traditional barriers are falling away with private banking steadily being repositioned as a more accessible mainstream offering.

Investec is making a decisive push into the country’s affluent banking segment, aiming to nearly triple its market share as it seeks to establish a stronger foothold beyond its traditional high-net-worth base.

The premier international bank and wealth manager is targeting a sharp rise in market share from 7% to 20% as it aims to dominate a group it believes has been widely overlooked. The bank has a traditional stronghold at the very top of the market but has identified individuals earning between R800 000 and R1.5-milion a year as a critical battleground.

Capitec, typically focused on mass market, recently revealed a 20% year-on-year increase in the segment driven by added premium benefits, competitive savings rates and transparent forex services without higher fees.

Standard Bank also holds a prominent position in South Africa’s affluent client segment, operating alongside competitors. The bank services approximately 1.2-million affluent and private banking clients.

Itumeleng Merafe, head of private banking in SA at Investec, said the financial institution has been underrepresented in this market but highlighted that the segment is both underserved and increasingly valuable. He explained that affluent professionals are typically in their 30s and 40s and are too complex for retail banking yet often considered too early in their wealth journey for private banking. He said Investec previously focused on chartered accountants, actuaries, legal specialists and medical specialists but are now broadening it through the investments made on their digital platforms.

“Clients in the affluent sector are not looking for just another transactional platform but are looking for a holistic financial services partner. The execution is in flight, so this is not a strategy that we are looking into [for] the future, it’s something that we are executing and we’ve been very clear around results-end of our execution for the 2030 goals.”

The current client base for Investec already reflects its strength in higher income tiers. Of its 128 000 core clients, high net-worth clients earning above R5-million annually dominate at 41%, while clients earning between R1.5-million and R5-million come second at 25%.

He said this segment remains the foundation of the business and includes a full suite of services, from banking and wealth management to business advisory and international banking.

Merafe highlighted that this is the most resilient market that remains strong despite shocks.