Making 1+1 equal more than 2 

“It is like making 1+1 equal more than 2”, is how Nedbank’s Andiswa Bata described the bank’s acquisition of Eqstra and iKhokha over the past two years. 

Bata, who heads up the Green Bank’s Business and Commercial Banking unit, explained that these acquisitions are not simply being plugged into Nedbank’s systems. 

Rather, they are at the forefront of the rejuvenation of Nedbank’s offering to small and medium-sized businesses. 

The bank, like its established competitors FNB, Standard Bank, and Absa, is facing intense competition in the business banking space. 

While much focus has been on various fintechs such as Yoco and iKhokha, Capitec’s business banking offering has gained strong traction in recent years. 

This has forced the incumbents to rethink their offerings, particularly at the lower end of the market, with regard to small businesses. 

The challenge is what Bata has been brought in to solve at Nedbank, after leading FNB’s business banking unit to become the largest player in the small-business segment of the market. 

Bata’s two major plays so far have been the acquisition of Eqstra in June 2024 and iKhokha in December 2025 for R1.1 billion and R1.65 billion, respectively. 

They are also the source of many questions, with Bata admitting that the bank’s leadership has been consistently asked by investors, “What did you buy?”

Speaking to analysts and investors, Bata sought to answer this question alongside iKhokha’s Matt Putman and Eqstra’s Jacqui Carr. 

The two businesses could not be more different, with iKhokha being a prominent payment and business management software provider while Eqstra is a fleet management business. 

While they are different businesses, there is a common throughline – giving them the might of Nedbank’s balance sheet and enabling the cross-selling of products into their client bases. 

How 1+1 can equal more than 2 is that the cross-selling will happen in both directions, Bata explained, and the two businesses will effectively absorb parts of Nedbank’s existing operations.

In other words, both iKhokha and Eqstra will become full-service financial services businesses almost overnight. 

Both will be able to tap into Nedbank’s balance sheet to provide financing for clients, as well as its transaction infrastructure, compliance systems, and cross-sell products. 

Instead of iKhokha and Eqstra going to clients to provide only payment solutions or fleet management, they will be able to offer extensive lending services, insurance products, and access to other banking products.

Making it all work 

On paper, both of the businesses Nedbank bought are formidable in their own right. While neither is profitable, the bank said both are tracking well against internal targets. 

iKhokha is just over a decade old and has grown rapidly, now serving more than 50,000 clients and processing over R22 billion annually. 

Its lending product, Cash Advance, has grown strongly and has disbursed R3.5 billion to small businesses to date. With Nedbank’s balance sheet, this is expected to accelerate significantly. 

Eqstra, on the other hand, has over 600 corporate clients and owns over 13,000 vehicles as part of its fleet management business. This is coupled with R3.3 billion in assets and partnerships with over 6,000 suppliers.

Crucially, both businesses have built and own their entire technology stacks, which has eliminated third-party service providers and given Nedbank control of the IP. 

While both are being integrated into Nedbank’s systems, they are set to be run independently and retain their management teams. 

The fleet management business has proven to be the easier of the two to integrate into Nedbank’s existing offerings, with it effectively absorbing the historic NedFleet operation as of 1 May. 

Eqstra’s Carr explained that it has already begun offering clients access to the full suite of services enabled by the Nedbank partnership. 

She noted that this will boost Eqstra’s already significant value-added services business, which already accounts for 25% of revenue. 

Much of the past two years since the acquisition have been spent integrating the two companies’ systems and picking up low-hanging cross-selling fruit. 

In the long run, Carr said Nedbank’s scale will enable Eqstra to provide sector-specific solutions, which will translate into improved capital efficiency and asset utilisation. 

The iKhokha play

iKhokha will prove more difficult to integrate, as the payments provider has its own payment rails and systems that will need to be merged with Nedbank’s. 

To accelerate this process and avoid significant teething problems, much of iKhokha’s existing operations will remain unchanged, with minimal changes needed to integrate with Nedbank. 

As iKhokha CEO Matt Putman explained, the integration with Nedbank is more about creating a “banking lite” service for small businesses. 

This will be a business banking starter pack for small businesses, giving them access to Nedbank’s full suite of services through iKhokha. 

Thus, the iKhokha offering will not be subsumed into Nedbank’s business banking unit, but rather be augmented by it.

Putman explained that integrating with the bank means turbocharging many of iKhokha’s existing services and offering banking services to its merchants. 

This includes relatively basic services, such as credit and debit cards, all the way through to long-term plans to create payroll solutions. 

Putman said the aim is to create a one-stop shop for small businesses, rather than the current dynamic where they have different providers for their point-of-sale systems, bank accounts, software, and stock management. 

Access to Nedbank’s payment systems will also enable iKhokha to greatly enhance its near-real-time settlement offering. 

Before the end of the year, Putman expects the company to roll out twice-daily settlement for Nedbank customers, something no other offering provides.

On the Nedbank side of things, buying iKhokha gives it access to a client base that it struggled to penetrate, with its brand not proving attractive to small businesses, particularly in the informal sector. 

There is also an expectation that the iKhokha system will be replicated through Nedbank’s key markets in Africa, particularly in the fast-growing East African region.