Nedbank Group Posts Earning Growth as Strategy Shifts, JSE: NED Share Price Retreats from Records
Nedbank Group reported a 2% rise in 2025 headline earnings, supported by improved credit quality and major strategic shifts across South...
Quick overview
- Nedbank Group reported a 2% increase in headline earnings for 2025, reaching R17.2 billion, driven by improved credit quality and lower impairment charges.
- The bank underwent significant structural changes, creating new client-focused clusters and acquiring fintech firm iKhokha to enhance its SME offerings.
- Nedbank plans to acquire a controlling stake in NCBA Group Plc, reinforcing its focus on East African markets amid a strategic reset away from West Africa.
- Despite economic challenges, the outlook for 2026 is cautiously optimistic, with projected GDP growth and a potential decline in interest rates.
Nedbank Group reported a 2% rise in 2025 headline earnings, supported by improved credit quality and major strategic shifts across South Africa and East Africa.
Earnings Growth Supported by Lower Impairments
Nedbank reported headline earnings of R17.2 billion ($1.07 billion) for the year ended December 31, 2025, up 2% from R16.9 billion a year earlier. The modest growth came against a backdrop of subdued revenue expansion and persistent economic headwinds in South Africa.
A key driver of the improvement was an 18% decline in impairment charges, which fell to R6.6 billion. The bank attributed this reduction to proactive derisking strategies and improved front-book origination quality. Stronger credit discipline and better asset quality helped cushion softer revenue momentum.
While revenue growth remained moderate, Nedbank demonstrated resilience through disciplined cost management and risk controls, offsetting macroeconomic pressures.
Transformational Strategic Moves in 2025
Management described 2025 as a transformative year marked by bold structural changes. The group restructured its Retail and Business Banking (RBB) and Nedbank Wealth clusters into a more client-focused model. From July 1, 2025, two new clusters were created:
- Personal and Private Banking (PPB)
- Business and Commercial Banking (BCB)
Leadership appointments were finalized, and management reported strong early momentum from the redesigned structure.
Nedbank also completed the acquisition of 100% of fintech firm iKhokha, strengthening its SME offering through digital innovation and inclusive financial services.
In December 2025, the bank exited its 21.2% stake in Ecobank Transnational Incorporated (ETI), signaling a strategic reset away from West Africa.
East Africa Expansion: NCBA Deal
In early 2026, Nedbank announced plans to acquire a controlling stake of approximately 66% in NCBA Group Plc for an estimated R13.9 billion.
Kenya’s Capital Markets Authority granted a regulatory waiver on February 19, 2026, allowing Nedbank to proceed without making a mandatory full takeover offer. This exemption cleared a major hurdle and reinforces Nedbank’s sharpened focus on SADC and East African markets.
Outlook for 2026
CEO Jason Quinn expressed cautious optimism for 2026, citing improving economic conditions in South Africa. GDP growth is projected at 1.5%, with consumer spending expected to strengthen as interest rates decline.
Inflation is forecast to stabilize near the Reserve Bank’s 3% target, supported by a stable rand and lower global oil prices. The repo rate could fall another 50 basis points to 6.25% by year-end.
Credit growth is projected to reach approximately 7.7%, though management warned that normalized wholesale impairments and the absence of ETI associate income may partially offset gains.
Return on equity is expected to remain above 15% in 2026 and gradually build toward 17% over the medium term
Nedbank Breaks Its Downtrend as Momentum Returns
After spending nearly a year under sustained selling pressure, Nedbank Group’s share price staged a powerful comeback. The stock had cascaded to R206 by late September as the bank’s first-half 2025 performance delivered limited upside surprises and rising costs eroded margins. Combined with a persistent technical downtrend and repeated failures to break above the long-standing R315 resistance from back in 2018, market sentiment remained firmly bearish for most of the year until it found support.
NED Share Chart Monthly – The Rebound Has Broken Above All MAs
That picture shifted dramatically in October last year. After briefly slipping to the 200-month simple moving average (purple), Nedbank found solid support above R200 and began to reverse sharply. Over the past two months, the stock has surged to R267—climbing back above all major moving averages and setting its sights once again on the R315 historical ceiling which was broken last Thursday after massive 8% surge, taking the JSE: NED share price to a new record above R318.
The shift reflects renewed investor appetite for South African financials, an improving macro backdrop, and a recognition that Nedbank’s underlying fundamentals remain stronger than headline figures initially suggested. However, we’re seeing a retreat this week due to the war on Iran from Israel and the US. But this is a good opportunity to buy.
Nedbank Group FY2025 Results – Key Points
📊 Earnings Performance
- Headline earnings increased 2% to $1.07 billion (R17.2 billion)
- Up from $1.05 billion (R16.9 billion) in 2024
- Growth supported primarily by improved credit quality rather than strong revenue expansion
🏦 Credit & Impairments
- Impairment charges fell 18% to $410 million (R6.6 billion)
- Credit loss ratio improved to 68 basis points, down from 87 bps
- Reflects stronger credit origination standards and lower loss ratios
- Improved asset quality was the main offset to subdued macro conditions
💰 Revenue Trends
- Net interest income rose 3% to $2.67 billion (R42.9 billion)
- Non-interest revenue increased 4%
- Total revenue up 3% to $4.59 billion (R73.9 billion)
- Growth constrained by South Africa’s slow economic expansion and elevated interest rates
🌍 Strategic Developments
- Completed sale of 21.2% stake in Ecobank Transnational Incorporated (ETI) for approximately $100 million
- Portfolio streamlined, with sharper focus on Southern and East Africa
- Disposal reduced international associate contributions
- Profit after tax declined to $584 million (R9.4 billion), impacted by:
Ecobank disposal
- One-off Transnet-related settlement
📈 Shareholder Metrics
- Diluted headline EPS rose 3% to $0.226 (3,628 cents)
- Return on equity eased to 15.4% (from 15.8%), still above cost of equity (14.6%)
- Final dividend unchanged at $0.069 (1,104 cents)
- Full-year dividend increased 3% to $0.133 (2,132 cents)
Conclusion: Nedbank’s 2025 results reflect steady resilience rather than rapid expansion. Improved credit quality, decisive portfolio restructuring, and a clear strategic pivot toward East Africa position the group for gradual recovery. While macroeconomic and income headwinds remain, management’s disciplined execution and regional focus suggest a cautiously improving trajectory heading into 2026.
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