As the global economy navigates its way through market turbulence, corporate and investment banking (CIB) finds itself at a critical inflection point in 2025.
Multiple factors, including geopolitical realignments, regulatory changes and transformative market trends, are reshaping the sector.
Lourens van Rensburg, head of Investec Corporate & Institutional Banking, says US President Donald Trump’s tariff strategy and a rapidly evolving geopolitical landscape have generated significant uncertainty and volatility across global economies.
“Trade fragmentation and the emergence of new trading blocs will likely affect supply chains. The imposition of US tariffs on South Africa also necessitates that we compete with other nations to secure new markets.”
Van Rensburg notes that these factors have compounded existing macroeconomic pressures and led to slower growth in many countries, creating an exceptionally challenging environment for the risk management community.
This uncertainty is filtering through to boardrooms as established supply chains are under strain and costs are rising, forcing businesses to rethink how they operate.
Given the challenges, corporates are looking for more than transactional support from their banking providers, requiring strategic partners that can anticipate risks, unlock growth and finance transformation to build resilience and reposition for growth in a volatile multipolar world.
“Many risk functions within financial institutions are likely to find it increasingly difficult to predict potential market and credit risk scenarios in both domestic and international markets,” says Van Rensburg.
In this environment, enhanced financial analysis and increased monitoring can provide early warning signals for potential financial distress, with scenario analysis and stress testing serving as vital tools for understanding the various potential outcomes and their impact on transactions or asset portfolios, he says.
“Tariffs not only pressure client margins but may trigger defaults, requiring banks to strengthen monitoring and enhance risk analytics.”
In addition to mitigating risks, banks also need to support clients and collaboratively seize opportunities that emerge from the volatility. In this regard, Van Rensburg points to a more constructive local outlook despite the global headwinds.
“The local economy is showing signs of a mild cyclical upturn, with interest rates expected to remain contained into 2027. The national infrastructure development agenda is progressing, albeit slowly, with reforms gaining traction beyond renewable energy investments to encompass transmission, freight logistics, port infrastructure and water,” he says.
This creates meaningful opportunities for CIB players to support long-term, high-impact projects.
Tariffs not only pressure client margins but may trigger defaults, requiring banks to strengthen monitoring and enhance risk analytics
— Lourens van Rensburg
Mike Harvey, managing executive of investment banking at Absa CIB, highlights how investment banks are having to invest significant capital as they transform portfolio management and risk assessment capabilities.
“Volatile markets are making primary issuances more challenging, meaning issuers need to be prepared to take advantage of short periods of market stability to access these deep liquidity pools at the right pricing points.”
However, Harvey says domestic capital markets remain buoyant with excess liquidity chasing local current asset prices tighter.
“Regional fragmentation also creates opportunity for us to work closely with international clients to explore new opportunities through our pan-African platform and international corridors.”
From a regulatory perspective, Harvey says Basel IV regulations, developed to strengthen the global banking system, mean banking institutions will need to adjust pricing models and total return view to navigate these changes effectively.
“Furthermore, ESG policies and strategies will remain an integral part of the local investment space, despite softening in some markets,” he says.
Van Rensburg adds that Basel IV and sustainability mandates aren’t just regulatory checkboxes; they’re pushing banks to think smarter and act more strategically.
“Basel IV is making banks more intentional about where capital goes. It’s encouraging a shift towards backing high-quality, high-impact transactions that align with a deeper understanding of client needs and long-term value.”
Furthermore, new sustainability rules are shifting how banks look at risk, and what gets funded, says Van Rensburg.
“This is speeding up the focus on sustainable and transition finance, areas where banks can add real value by supporting clients through their decarbonisation journeys, funding resilient infrastructure and unlocking innovation in green technologies. These changes are reshaping balance sheets and deal pipelines by putting more emphasis on capital efficiency, risk-adjusted returns and long-term impact.”
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