Massive restructuring for Nedbank
Nedbank has finalised its organisational restructuring, as the group’s bid to increase profitability takes a hit from the poor economic environment.
Nedbank CEO Jason Quinn said that the organisational restructuring of its Retail and Business Banking (RBB) and Nedbank Wealth Clusters was completed in time.
Nedbank previously said that by unifying its personal and juristic business segments into distinct, focused clusters, it would be able to offer more seamless and integrated banking experiences.
Since 1 July 2025, the Personal and Private Banking has provided a full suite of services to all clients from the youth to high-net-worth segments.
Business and Commercial Banking (BCB) covers the SME, commercial and mid-corp client segments.
“These changes have been well received by all stakeholders, including colleagues, clients and shareholders,” said Quinn.
“Key leadership positions have been filled, and our efforts now shift to execution, unlocking transformational growth opportunities, as well as efficiency and productivity enhancements,” said Quinn.
“I would like to express my appreciation to all Nedbankers for their dedication and steadfast support, particularly the resilience shown during the organisational restructure.”
The restructuring update came in the group’s financial results for the first half of 2025, which Quinn said were impacted by a challenging operating environment.
Uncertainty was elevated due to the US tariff regimes, while geopolitical conflicts resulted in major market volatility and reduced business confidence.
The economic recovery momentum slowed in South Africa, with issues around water supply, municipal services, and crime and corruption remaining.
Despite low business confidence, limited fixed investment and an uncertain economic outlook, corporate loans and advances growth rose to 8.1% in June.
Household credit growth remained muted at 3.1% despite reduced interest rates since September 2024.
In this context, the group’s headline earnings increased by 6% to R8.4 billion. The group’s ROE improved slightly to 15.2%.
The increase in headline earnings was driven by non-interest revenue and associate income growth, ongoing improvements in impairments and management of expenses.
With Quinn stating that the balance sheet metrics remain strong, the group upped its interim dividend by 6% to 1,028 cents per share.
| Metric | June 2024 | Current Period | Change |
|---|---|---|---|
| Headline earnings | R7 911m | R8 399m | 6% |
| Revenue | R35 159m | R36 406m | 4% |
| Credit loss ratio | 104 bps | 81 bps | – |
| Total operating expenses | R19 775m | R21 492m | 9% |
| Cost-to-income ratio | 55.3% | 57.4% | – |
| Diluted headline earnings per share | 1 650 cents | 1 762 cents | 7% |
| Headline earnings per share | 1 699 cents | 1 800 cents | 6% |
| Basic earnings per share | 1 700 cents | 1 571 cents | -8% |
| Interim dividend per share | 971 cents | 1 028 cents | 6% |
| Net asset value per share | 23 097 cents | 24 522 cents | 6% |
| Common-equity tier 1 ratio | 13.3% | 13.1% | – |
Outlook
Looking ahead, the global economic outlook remains subdued and risks are elevated as US tariffs are expected to negatively impact business confidence, capital investment and global trade volumes.
South Africa’s economy is expected to improve amid higher consumer spending given higher real incomes, subdued inflation, reduced interest rates and withdrawals from savings.
“However, the 30% tariffs on South Africa exports to the US, weaker global growth and sluggish commodity prices will likely undermine business confidence, hurt exports and discourage private sector fixed investment.”
Nedbank forecasts GDP growth of 1.0% for 2025, followed by 1.5% in 2026, with downside risk.
Following the 25-basis-point interest rate cut in July 2025, the group expects rates to remain stable from here.
Amid the challenging South African environment, Nedbank has revised its 2025 guidance.
It now expects Diluted headline earnings per share (DHEPS) growth for the year to be low single digits and ROE to end the period around 15%.
It hopes to increase its ROE to 17% in the medium term, and over 18% in the long term.
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