Investec, the niche private-banking and wealth management Anglo-South African group, has amassed more than 2,000 corporate clients, with the lender now looking to get similar success in the bustling mid-market corporate segment.
The group’s annual report, published on Monday, shows it had at the end of March about 2,100 corporate clients and 137,000 asset finance group clients.
The group’s corporate and investment banking businesses have leading franchises across SA’s corporates, financial sponsors, state-owned enterprises, public sector bodies, institutions and intermediaries, it said.
The group’s corporate loan book in SA increased by 12.6% to R114.1bn in the year to end-March after strong growth from listed corporate lending, energy and infrastructure finance, as well as trade and asset finance.
The company said it continues to focus on growth in energy and infrastructure financing with a view to look for opportunities across the water, transportation and logistics sectors.
Investec has outlined plans to make inroads in the increasingly competitive mid-corporate banking segment, a sector with many businesses in SA.
The group’s plan is to create a single platform for mid-sized SA corporates to holistically manage their banking requirements and to accelerate transactional banking client acquisition to about three times the base of 2,700, translating to a market share of about 8% by full-year 2030.
Group CEO Fani Titi in a letter to shareholders said the group-wide growth strategies will collectively generate incremental returns of about 200 basis points over the next five years.
Growth in the mid-sized corporates segment is key to the group’s growth blueprint, with Titi saying the group is investing in platforms to enhance corporate mid-market propositions in both its anchor geographies, SA and the UK.
He said the group was “uniquely” placed to bring the Investec private-banking client experience to businesses.
“In SA, our objective is to create a single platform for mid-sized corporates to manage all their banking needs. We aspire to be the primary banking partner to these clients, seamlessly combining high-touch lending with an innovative,” Titi said.
“Our well-established UK corporate and investment banking franchise stands as the only integrated and diversified specialist bank catering to the UK corporate mid-market. We are now investing in transactional banking capabilities to deliver end-to-end corporate banking to this large and growing segment.”
The company is also looking to make serious inroads in private banking in the UK, where it aims to more than double its client base.
The lender is aiming to have a market share of about 18% in the private-banking segment in the UK, which will translate to about 18,500 clients in the next five years, from 7,500 now.
Bank of America expects Investec’s expansion blueprint in mid-market corporate and private-banking client segments will add at least £750m in revenue by 2030 — if the group meets the growth targets it set for itself.
Investec’s strategy to grow in the SA mid-market corporates will face stiff competition as its domestic rivals are also targeting mid-sized corporates for growth.
Nedbank is restructuring the business to also place greater emphasis on mid-sized corporates, typically those businesses with an annual revenue of R1bn and above — with the lender targeting a market share of 25%.
FNB, Standard Bank and Absa are also significant players in the market.
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