Nedbank reveals a 6% rise in half-year profits, reaching R8.4 billion, despite operating in a tough environment.
Nedbank Shifts Focus and Exits Ecobank Stake in Strategic Pivot
Nedbank Group, one of South Africa's leading banks, has announced a significant strategic shift in response to the challenging operating environment experienced in the first half of 2025. The updated strategy includes the divestment of its 21.2% shareholding in Ecobank Transnational Incorporated (ETI) and a refocus on the Southern African Development Community (SADC) and East Africa.
The decision to dispose of the Ecobank shares comes after a reassessment of the risks associated with Ecobank’s pan-African operations. Despite generating significant associate income since 2008, the returns were limited by currency volatility, regulatory uncertainty, and capital demands in Nigeria and other markets.
Nedbank's financial performance in the first half of 2025 was resilient but challenging. Headline earnings grew 6% to R8.4 billion, with a modest improvement in return on equity (ROE) to 15.2%.
The group aims to focus on its core markets within SADC and East Africa, where it can exert more direct control and capitalize on growth opportunities. This regional shift is integral to the group's medium- to long-term goal of raising ROE above 18% through growth initiatives and capital management.
In addition to this strategic pivot, Nedbank has completed an internal organisational restructure to create a more client-centred design, enhancing focus on key business units like Retail and Wealth.
Key highlights of Nedbank's financial performance for the six months ending 30 June 2025 include:
- Headline earnings (HE) increased by 6% to R8.4bn.
- The return on equity (ROE) improved slightly to 15.2%.
- Lending that supports sustainable development finance increased to R189bn.
- Retail digital transaction volumes and values in South Africa grew by 15% and 16%, respectively.
- Digital sales at Nedbank recorded 70%.
- The Nedbank Africa Regions client base increased by 11% to over 419 000.
Nedbank has also declared an interim dividend of 1 028 cents per share, up by 6% from the 2024 interim dividend. Renewable energy exposures at Nedbank grew to R47bn, making them market leaders.
The strategic review of Nedbank's investment in Ecobank Transnational Incorporated (ETI) has been concluded, and the investment has been classified as a non-current asset held for sale.
In terms of leadership changes, Ciko Thomas has been appointed as the Managing Executive of the Personal and Private Banking (PPB) cluster, and Andiswa Bata was appointed as Managing Executive of Business and Commercial Banking (BCB).
Jason Quinn, Chief Executive of Nedbank, has revised the 2025 guidance for DHEPS growth and ROE, expecting low single-digit DHEPS growth and aiming for medium-term ROE improvement to about 17%, targeting above 18% in the long term.
Despite the challenges, Nedbank's brand value increased by 24% to R20bn, and its social media sentiment ranked second highest among all South African banks. The number of digitally active retail clients at Nedbank increased by 8% to 3.2 million, and the group's balance sheet remained very strong, with CET1 and tier 1 capital ratios of 13.1% and 14.7% respectively. The adoption rate of the Nedbank Business Hub (NBH) for activities across all juristic segments increased to 65%.
Nedbank retained its 24% market share in SME clients and ranked #1 for best bank for start-ups and the most approachable bank for funding. The increase in HE was primarily due to growth in non-interest revenue (NIR) and associate income, improved impairment charge, and effective management of underlying expenses. Retail active and main banked clients grew at 6% to 7.3 million and 3.8 million respectively.
[1] Nedbank Group Limited 2025 Interim Results [2] Nedbank Group Limited 2025 Half-Year Financial Results [3] Nedbank Group Limited 2025 Strategy Update [4] Nedbank Group Limited 2025 SADC and East Africa Focus [5] Nedbank Group Limited 2025 Ecobank Divestment
- Nedbank, having divested its 21.2% shareholding in Ecobank Transnational Incorporated, will now focus on strengthening its presence in the Southern African Development Community (SADC) and East Africa, aiming to raise its return on equity (ROE) above 18% through growth initiatives and capital management, showcasing a new era for personal finance and banking within these regions.
- With the shift in strategy, Nedbank has prioritized key business units like Retail and Wealth, streamlining its internal organization to become more client-centered and enriching its digital offerings, such as increased digital sales and a growth of 15% and 16% in Retail digital transaction volumes and values in South Africa.
- As part of the updated strategy, Nedbank aims to channel more resources into sustainable development finance, with lending in this area reaching R189bn, and has also made a significant stride in the renewable energy sector, as renewable energy exposures now total R47bn, cementing its position as a market leader in finance and clean energy investments.
