‘We are really listening to our clients and showing more appreciation for their needs’, says Herman de Kock, managing executive for Nedbank Mid-corporate.
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CIARAN RYAN: The mid-corporate market – companies with annual turnover starting at R750 million – forms a critical part of South Africa’s industrial and employment base.
Many of these businesses have progressed from first-generation family operations into sophisticated third- and fourth-generation enterprises, with mature balance sheets, diversified ownership and ambitious growth trajectories.
They don’t typically get much love from the banks, but Nedbank sees huge growth opportunities in the mid-market segment. It also has some interesting research and insights into this often-neglected but important part of the South African economy.
Joining us to discuss this is Herman de Kock, managing executive for mid-corporate at Nedbank. Hi, Herman, thanks again for your time. Let’s dive into this.
How do you define the mid-corporate market? Is it [those with] a R750 million turnover, or is there a broader category there? And what kind of a year did 2025 turn out to be for these companies?
HERMAN DE KOCK: Ciaran, thank you and it’s great to have this conversation again with you and the Moneyweb listeners – always a beloved audience to talk to.
I think you basically summarised it very well in your introduction – the term ‘mid-corporate’. How Nedbank Mid-corporate defines this market is privately owned or family-owned businesses with a good track record of growth and therefore with established – and in many cases – mature balance sheets, very strong growth aspirations for the future, and mostly non-listed entities.
With that definition, you can actually really have a focused view on ‘mid-corporates’ in the South African economy being at the upper end of your typical business banking or commercial banking segment that roughly starts around a R750 million turnover – and then turnover going into the billions.
The question around size and turnover is one aspect. But how I position it is with the opening of family-owned, privately owned, strong growth ambitions for the future, actually enabled Nedbank Mid-corporate to get a very focused view and understanding of the mid-corporate market, understanding its contribution to this economy as you rightly stated in your introduction; and then bringing banking solutions to that group of clients that really resonate with them. We’ve seen that through our positive response in the market since our formal launch earlier this year in February 2025.
Now okay, what did 2025 look like for the mid-corporate landscape? I think if you look at that, it actually is the same for South Africa Inc and Business South Africa. But there are some nuances on the corporate, which I’ll quickly touch on.
Just very briefly, 2025 started with a more positive outlook on the growth in the economy and everyone prepared to accelerate. But it was more a stop-go experience this year.
That was obviously caused by uncertainty and the more aggressive certainty that we received regarding tariffs and what they will do, the global volatility that this brought, policy ambiguity and also the uncertainty as to what the current geopolitical tensions and conflicts in terms of escalation are going to do to the world economy.
All of that then really made you feel, as a business, as though you were sitting ready in your car, ready to go, in gear, but with the handbrake actually not released so that you can really pick up speed.
Obviously that then brought us to a much more muted GDP growth than initially expected.
Therefore, instead of pursuing pure growth, many businesses, mid-corporates, shifted their focus towards diversification, margin protection, diversification of any concentrated risk and how to manage your risk further.
But there were also some structural tailwinds that came through – I think a much more stable energy supply supported by the improvements at Eskom and, very notably, the private sector’s contribution to alternative energy and renewables.
And then if I can maybe single out some sectors, we again saw good performance from the agri sector in terms of contribution.
Tourism is buoyant. The outlook in the South African context is really good.
And then the construction industry started to show some green shoots in certain pockets, especially with the infrastructure upgrading that’s happening.
Another very interesting space is your professional services – more towards your fintechs and financial-service providers, obviously leveraging off New Horizon Technologies – especially in the Web3 space.
Manufacturing remains active but under severe pricing pressure because of cheaper imported products.
So, just overall, every business can resonate with that view of 2025. But I think, in particular to the mid-corporate segment, which is such a critical contributor to South Africa’s GDP and also a sector that still has a strong growth path going forward in terms of expansion -and with that expansion obviously topline revenue growth and, ultimately, more job creation in South Africa.
It was, with that view and a mixed-emotion year in terms of 2025, a great outlook at the beginning. Then these headwinds – but some tailwinds obviously – I think set the scene very well for 2026 and going forward.
But one thing that we need to realise is the imperative of mid-corporates to grow because of, in many cases, a very strong growth thesis.
Then I can touch on the social aspect and the potential of job creation in the mid-corporate segment, which is pivotal for the South African community.
CIARAN RYAN: Yes, I get the sense from what you’re saying that the mid-corporate market has some unique characteristics – fairly different control structures, often family-controlled, and growing faster than the larger corporate market, I would say.
But you’ve gone over some of these challenges – the tariffs issue, maybe having to diversify abroad, having to find new markets and new sources of supply. My question is: were these mid-corporate companies able to adapt and what is your research showing in that respect?
HERMAN DE KOCK: One characteristic in the mid-corporate market segment – which Nedbank Mid-corporate recognises and appreciates very thoroughly – is the sophistication of its client base.
As they grow and become more sophisticated, not at the expense of the entrepreneurial flair in these family-owned entities, there’s a big appreciation for that, and we saw that within the scenario of the tariff exposure, the agility of corporates to start to explore new markets and have the ability to go into new markets – and then to obviously have a pivot to new geographies. So new markets not just locally but abroad to sustain the growth plan that they have.
I think if we also look at the adoption of technology – I mentioned Web3 – which is very broad. Within Web3 you find blockchain technology [and] one would find the word ‘crypto’ there. But ultimately, if you have a thorough understanding of the Web3 environment, it basically paves the way for the future of payments technology, both domestic and cross border – which is absolutely pivotal in the financial services environment.
It is interesting to see that we now have mid-corporate clients starting to explore this environment – tokenisation of assets, exploring alternative payment means – all to make sure that they can still provide sustainable and reliable services to their customer base, obviously being dependent on the supplier base to assist them.
So lots of innovation along the value chain.
Again, the mid-corporate community is obviously focused on mitigating risk, working closely, especially with Nedbank being world class in managing risk – on how to identify the underlying risks and then position the business to hedge against or mitigate them.
Lastly, maybe just to quickly touch on what is interesting to observe – the increased need over and above your conventional senior-debt banking solutions, but a leaning into your non-conventional structures beyond blended senior debt.
That’s a very interesting conversation then, going into and even beyond mezz and private equity, but going into a conversation around private credit and equity funding, which is a trend that we see more and more in this market segment.
CIARAN RYAN: Okay, let’s just drill into that a little. You’ve touched on mezz – mezzanine finance – and private equity. How is Nedbank Mid-corporate doing things differently? I mentioned that this is a market segment historically neglected by the banks. You see it differently, no doubt. So just tell us about how you would go about approaching the mid-corporate market in terms of the funding requirements that these clients have.
HERMAN DE KOCK: Let me just touch first on our approach on how we define the mid-corporate market segment.
Underlying that is focus, and through focus – in other words, not going too broadly – but truly homing in on the voice of the mid-corporate segment as we define it and getting an understanding. We then designed our value proposition and value-delivery system – or academic term for your operating model – around our mid-corporate clients’ needs.
What we’ve seen just this year in how we designed ourselves with that appreciation of the needs of the corporate clients, we really then demonstrate bringing solutions and an engagement with our corporate clients – whom they regard very highly – and really start to see that we have listened to them and that we are really showing more appreciation for their needs.
I can touch first on our operating model, which really allowed Nedbank Mid-corporate to distinguish itself through our agility and our fast execution, very quick turnaround times from a credit point of view, our internal workflows and credit processes [which] became fast and decision cycles were accelerated.
We brought in digital solutions to just increase, in the midst of a high-touch service model, just more convenience for our clients.
It can be and it was something as simple as a digital-facility … signing capability that radically reduced turnaround times. This makes it easier for the shareholders of these corporates, regardless of where they are in the world, to apply their signature [by] … digital means and we can move on with a solution for the client.
Our coverage model is a lot more client-facing, also through innovative roles that we brought in that do a lot of work behind the scenes while our bankers are with our clients more, having the right conversations.
I think all of this work that we did was confirmed as being highly appreciated by the mid-corporate market, especially our existing client base, and not by marking our own homework. It was done through KPI Research, an independent research body that indicated through an in-depth customer-satisfaction conversation with shareholders and a C-suite of these corporates … comparing us with the market, and that Nedbank is leading the pack.
I’m very pleased to report that we had our inaugural – since our launch – survey done in May and had the report published. We were leading the market in terms of customer satisfaction, in other words, delivering what we said we will do with high satisfaction levels.
The most recent one that was published in October 2025 showed that we retained our number one position and even improved on that.
CIARAN RYAN: Okay. Very quickly, Herman, 2026 is around the corner. What can we expect next year for the mid-corporate market?
HERMAN DE KOCK: There are several tailwinds, structural tailwinds, that I think are giving us a much more optimistic outlook on 2026. We had rate cuts. We had one as recently as yesterday. That really is bringing an additional boost into the economy, into Business South Africa. We have a much more stable energy supply, as already mentioned.
And we have a much more optimistic foreign view of South Africa. That is expressed through the recent upgrade by S&P from negative to BB with a positive outlook, and obviously managing to get off the FATF grey list.
So all of those, together with operational discipline from a government perspective, are important drivers for a foundation that is set now for 2026, where we can expect much better performance from a GDP point of view.
CIARAN RYAN: Okay. And of course, a strong rand will help those people who are importers as well.
We’re going to leave it there. That was Herman de Kock, managing executive for mid-corporate at Nedbank.
Brought to you by Nedbank Mid-corporate.
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