In the glass-walled boardrooms of South Africa’s biggest banks, executives are ramping up efforts to win clients from a once overlooked corporate segment: medium-sized companies that are now too lucrative to ignore.
Faced with growing competition for large corporates and squeezed retail banking margins in a sluggish economy, lenders including Nedbank, Investec, FirstRand’s First National Bank and Standard Bank are targeting the sector with dedicated teams and tailored services.
This market comprises companies with annual revenue of R100 million to around R1.5 billion, spans sectors from manufacturing and mining services to agriculture, retail and logistics. Bank executives say these businesses are often cash-rich, fast-growing and steadier and provide more attractive returns than more volatile retail and small business portfolios.
“This is a strategic growth vector for Nedbank. We’re scaling the operation,” Marlon Davids, the head of mid-corporate coverage at Nedbank’s Business and Commercial Banking unit, told Reuters.
Nedbank and Investec raise the stakes
Nedbank has created a mid-corporate unit with its own credit committees and commercial bankers targeting up to 30% of South Africa’s estimated 3,000 to 3,500 medium-sized companies generating annual revenue of at least R750 million, Davids said.
The country’s fourth-largest bank by assets plans to triple the unit’s banker headcount to about 30 from 10, while its client base has already grown 50% since its launch last year.
Investec, a specialist private bank, says incumbent banks serving medium-sized companies are generating returns on equity well in excess of 30%, roughly double those of most major lenders.
The sector is dominated by privately or family-owned businesses, often with substantial cash balances looking for a home and transactional banking services.
To tap into that, Investec plans to grow its mid-corporate client base by 7,000 to 10,000 by 2030, and raise annual revenue from the segment to R3.8 billion from R1.7 billion in 2025, said Nick Riley, head of business and commercial banking at Investec.
The bank has invested more than R300 million to set up full banking services which it plans to roll out before March 2027, Riley said.
Investec lacked the full day-to-day transactional banking capabilities needed to compete with larger rivals for medium-sized corporate clients.
“In South Africa, we continue to see good client acquisition momentum. We’re starting to see the flywheel really gather momentum,” Investec Group Chief Executive Fani Titi told reporters in May.
FNB, which says it already serves over 20,000 medium-sized companies, combined its mid- and large corporate clients units into a single division in March, allowing it to sell more sophisticated banking products to fast-growing firms.
Standard bank looking across Africa
For Standard Bank, Africa’s largest lender by assets which has an around 28% share of South Africa’s mid-corporate market, the opportunities extend beyond the continent’s most industrialised economy.
The bank sees growth prospects in East and West Africa, where its market share remains below 10%, Bill Blackie, its chief executive of Business and Commercial Banking said at the bank’s March capital markets day.
It estimates that Africa’s mid-corporate segment represents a potential revenue pool of R150 billion, with 85% of that in South Africa, Nigeria, Ghana, Kenya, Uganda and Tanzania.
“Today our customers trade more across the continent than they do with any other single trade bloc, be it China or the U.S.,” Blackie told Reuters.
“We’re seeing very high growth rates coming out of those economies.”
The bank is targeting lending growth of about 10% and deposits above R725 billion by 2028 in its business and commercial banking division, up from R514 billion in 2025.
The intensifying competition is likely to benefit medium-sized companies, analysts said.
“More options should lead to better service levels, more tailored funding solutions and, in some cases, better pricing,” said Keagan Higgins, an investment analyst at Anchor Capital, a boutique wealth and asset management firm.
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- South Africa's major banks, including Nedbank, Investec, FirstRand, and Standard Bank, are increasingly targeting medium-sized companies with annual revenues between R100 million and R1.5 billion due to their lucrative and stable financial profiles.
- Nedbank has created a mid-corporate unit with plans to expand its banker team threefold to serve up to 30% of the mid-sized market, already seeing a 50% client base growth since last year.
- Investec seeks significant expansion, aiming to grow its mid-corporate client base by up to 10,000 by 2030 and doubling its annual revenue from this segment by 2027 after investing R300 million in full transactional banking services.
- First National Bank has merged its mid- and large corporate units to provide more sophisticated banking products to fast-growing firms, currently serving over 20,000 medium-sized companies.
- Standard Bank views mid-corporate growth opportunities across Africa, especially in East and West Africa, targeting 10% lending growth and deposits over R725 billion by 2028, with analysts anticipating improved services and funding options due to intensified competition.
In the glass-walled boardrooms of
Faced with growing competition for large corporates and squeezed retail banking margins in a sluggish economy, lenders including
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Investec, a specialist private bank, says incumbent banks serving medium-sized companies are generating returns on equity well in excess of 30%, roughly double those of most major lenders.
To tap into that, Investec plans to grow its mid-corporate client base by 7,000 to 10,000 by 2030, and raise annual revenue from the segment to R3.8 billion from R1.7 billion in 2025, said Nick Riley, head of business and commercial banking at Investec.
Investec lacked the full day-to-day transactional banking capabilities needed to compete with larger rivals for medium-sized corporate clients.
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FNB, which says it already serves over 20,000 medium-sized companies, combined its mid- and large corporate clients units into a single division in March, allowing it to sell more sophisticated banking products to fast-growing firms.
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It estimates that Africa's mid-corporate segment represents a potential revenue pool of R150 billion, with 85% of that in
"Today our customers trade more across the continent than they do with any other single trade bloc, be it China or the U.S.," Blackie told Reuters.
"We're seeing very high growth rates coming out of those economies."
"More options should lead to better service levels, more tailored funding solutions and, in some cases, better pricing," said Keagan Higgins, an investment analyst at Anchor Capital, a boutique wealth and asset management firm.
Read More: GDP up by 0.5% in first quarter as finance, real estate, agriculture drive growth
