Nedbank reported marginal 2% growth in headline earnings in the year ended December, despite growth in customer numbers that saw the group breach 8-million for the first time in its 138-year history.
The group, South Africa’s fourth-largest lender by assets, said on Tuesday that its profit for the year under review increased 2% to R17.2bn, while return on equity declined from 15.8% to 15.4%.
Group CEO Jason Quinn said the strategic decisions the group had made were beginning to bear fruit.
“Our strategic value unlocks — which focus on driving faster revenue growth and enhancing productivity — are making good progress. For the first time in the group’s history, total clients reached 8-million,” Quinn said.
“Well-executed initiatives included the restructuring of our retail and business banking (RBB) and Nedbank Wealth Clusters, the sale of the group’s ETI shareholding, the acquisition of fintech innovator iKhoka and, more recently, an offer to acquire a 66% stake in NCBA Group.”
In January the lender took the market by surprise when it announced a R13.9bn purchase of a controlling stake in Kenyan bank NCBA.
The results for the year under review show the group is making progress in its stated objectives
Moody’s has said Nedbank’s proposed purchase of a controlling stake in NCBA was credit positive for South Africa’s banking major because it would help diversify its earnings base and strengthen its presence in higher-growth African markets.
NCBA’s main shareholders include the Kenyatta family and that of the erstwhile governor of the Central Bank of Kenya, Philip Ndegwa. It has a client base of 60-million.
NCBA also operates in other East African economies — Tanzania, Uganda and Rwanda — and has a “digital offering in Ghana and Ivory Coast” in West Africa.
Quinn joined Nedbank from Absa in 2024 and immediately embarked on a shake-up of its retail and business banking divisions. The reorganisation involved the creation of a business and commercial banking unit, a juristic-focused cluster that will cover SMEs and commercial clients.
Nedbank has restructured the business to also increase 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%.
The battle for market share in business and commercial banking, particularly in the SME and mid-sized markets, is becoming a highly contested space in South Africa’s banking sector, with the likes of Investec having also entered the fray.
The results for the year under review show the group is making progress in its stated objectives. The personal banking division reported 9% growth in digitally active clients to 3.4-million, with digital transaction volumes up 10%.
Quinn said he expected return on equity for the 2026 financial year to be above 15%, building in the medium term “to about 17%, supported by stronger revenue growth and a well-managed expense base”.
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