Nedbank Earnings—Profitability Concerns Send JSE: NED Share Price Sliding, Downtrend Deepens
Nedbank shares fell sharply as H1 2025 results failed to inspire confidence, with investors reacting to sustained profitability pressure...
Quick overview
- Nedbank shares dropped nearly 6% following disappointing H1 2025 results, reflecting ongoing profitability pressures.
- Despite a 6% increase in headline earnings and improved credit quality, rising operating costs have negatively impacted profitability.
- The stock has been in a downtrend since December 2024, with key resistance levels preventing recovery.
- If the 200 weekly SMA support level fails, Nedbank could see further declines towards the R200 mark.
Nedbank shares fell sharply as H1 2025 results failed to inspire confidence, with investors reacting to sustained profitability pressure and persistent technical weakness.
Market Reaction and Price Action
Nedbank Group (JSE: NED) tumbled nearly 6% on Tuesday, closing at R234.07, as its first-half earnings failed to meet investor expectations. The stock has been in a downtrend since December 2024, repeatedly rejecting the R310 resistance zone, the record high set in 2018. Last week, the 100-day SMA once again acted as resistance near R250, keeping the bearish trend intact.
NED Share Chart Daily – The 100 SMA Keeping the Trend Down
Technical Outlook
The downtrend is reinforced by the 100 SMA on the daily chart, which has consistently capped attempts at recovery. On the weekly timeframe, the 200 SMA is now the key support level. If this support breaks, the next significant downside target lies near R200, a long-term support zone that could attract buyers.
NED Share Chart Weekly – The Rebound Has Faded
Earnings Takeaway
Despite reporting resilient headline earnings and improved credit quality, Nedbank’s rising operating costs have squeezed profitability, keeping investor sentiment weak. The higher interim dividend underscores management’s confidence in its balance sheet, but it has not been enough to stem the selling pressure.
Nedbank Posts Solid H1 2025 Performance Despite Cost Pressures
Nedbank Group delivered modest growth in the first half of 2025, supported by improved credit quality and higher headline earnings, even as expenses weighed on profitability.
Financial Highlights
Headline Earnings:
- Rose 6% to R8.4 billion (H1 2024: R7.9 billion), reflecting steady operational performance.
Revenue Growth:
- Increased 4% year-over-year to R36.41 billion, driven by core banking operations and stable interest income.
Credit Quality Improvement:
- Credit loss ratio declined to 81 bps from 104 bps a year ago, showing improved loan book performance and prudent risk management.
Operating Costs and Efficiency:
- Operating expenses rose 9% to R21.49 billion, outpacing revenue growth.
- Cost-to-income ratio worsened to 57.4% (H1 2024: 55.3%), signaling ongoing expense pressure.
Earnings Per Share:
- Headline EPS: 1,800 cents (+6% YoY).
- Diluted Headline EPS: 1,762 cents (+7% YoY).
- Basic EPS: 1,571 cents (-8% YoY) due to higher expenses and one-off impacts.
Dividend & NAV:
- Interim dividend: 1,028 cents per share (+6% YoY).
- Net asset value per share: 24,522 cents (+6% YoY), reinforcing the group’s solid capital position.
Outlook: Unless the 200 weekly SMA holds, Nedbank risks extending its decline toward the R200 mark. Investors will likely remain cautious until earnings momentum improves or the stock decisively breaks above its bearish moving averages.
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