Staff Writer
Nedbank Group says it is maintaining stable financial momentum despite tough operating conditions.
The bank released its voluntary trading and pre-close update for the 10 months to 31 October 2025, showing that performance remained steady even as South Africa’s economy faced modest growth, geopolitical uncertainty and concerns over US tariffs.
These factors continued to weigh on business confidence and delayed capital investment, while transactional activity remained muted.
Nedbank said conditions have started to improve. Subdued inflation created room for further interest rate cuts, which helped lift household credit demand. Investor sentiment strengthened after progress on structural reforms, South Africa’s removal from the FATF grey list, fiscal discipline in the Medium-Term Budget and Standard & Poor’s upgrade of the country’s long-term foreign currency rating to BB with a positive outlook. The successful hosting of the 2025 G20 Johannesburg Summit also boosted confidence.
Headline earnings growth remained in line with expectations. Higher net interest income and non-interest revenue, lower impairments and controlled expenses supported the performance. The update excludes the once-off N$600 million settlement with Transnet announced in November. Net interest income grew at low-to-mid single digits, showing slightly stronger growth than in the first half. Corporate and investment banking advances stayed above mid-single digits with solid pipelines, though some drawdowns shifted into 2026. Business and Commercial Banking recovered after earlier declines, and Personal and Private Banking maintained strong secured lending growth.
Deposit growth continued to outpace loan growth, in line with the bank’s strategy and gains in retail market share. The net interest margin declined slightly from 3.87% reported at mid-year due to lower interest rates. The impairments improved more than expected, with the annualised credit loss ratio falling below the midpoint of the bank’s long-term target range. Credit performance across all divisions remained solid, and Nedbank expects the full-year credit loss ratio to stay within targets.
Non-interest revenue rose below mid-single digits. Strong trading activity and insurance performance supported growth, while weaker fair-value adjustments and slower deal flow in CIB limited gains. Retail fee income remained strong, helped by client growth and better cross-selling. Expenses grew by mid-to-upper single digits but showed improvements from the first half due to slower staff cost growth and firm control of technology and accommodation spending.
The bank confirmed that no further income from Ecobank Transnational Incorporated will be recognised following progress on the sale of its stake. Excluding the Transnet settlement, Nedbank expects diluted headline earnings per share to be flat to slightly higher and aims for a full-year return on equity of 15% or more.
The CET1 capital ratio remained above the upper end of the target range, supported by strong liquidity. By October, Nedbank had repurchased and cancelled 10.54 million shares worth N$2.4 billion at an average price of N$229.53, below the group’s June book value per share and below current trading levels.
Caption
Nedbank Group says South Africa’s economic landscape remained difficult through the second half of the year.
- Photo: Contributed
