Nedbank is opening the taps
Nedbank expects strong credit growth in 2026 amid positive signs for the South African economy.
Speaking in the group’s financial results for the 2025 financial year, Nedbank Group CEO Jason Quinn said that South Africa’s growth prospects are more positive for 2026.
“Consumer spending will be a key driver as lower interest rates boost confidence and borrowing,” said Quinn.
“Inflation should remain around the Reserve Bank’s target of 3% during the latter part of the year due to a stable rand, low global oil prices, lower inflation expectations, and fewer supply-side challenges.”
Quinn said that interest rates could be reduced by another 50 basis points, which would bring the repo rate down to 6.25% by the end of 2026, with a plausible situation of its remaining flat for the foreseeable future.
With the lower interest rate environment, Quinn said that credit growth is also projected to be robust, ending the year at around 7.7%.
The expectations for 2026 come on the heels of 2025, which Quinn described as a transformative year for the bank, marked by many strategic decisions.
“Well executed initiatives included the restructuring of our Retail and Business Banking (RBB) and Nedbank Wealth Clusters, the sale of the group’s ETI shareholding, the acquisition of fintech innovator iKhoka, and, more recently, an offer to acquire a 66% stake in NCBA Group,” said Quinn.
However, he noted that the operating environment in 2025 remained volatile and uncertain, as evidenced by geopolitical conflict and uncertainty over US tariffs.
That said, there were several positive developments in South Africa on several fronts, resulting in an improved outlook.
“Notwithstanding persistent infrastructure challenges, structural reforms contributed to the stabilisation of energy and transport networks, leading to an improved operating environment, particularly for private
enterprises,” said Quinn.
“Supported by the economic recovery, higher business confidence, and greater fixed investment, corporate credit increased strongly off a low prior-year base.”
With inflation around the Reserve Bank’s revised target of 3% and interest rates far lower, household credit demand showed signs of recovery in the final months of the year.
Financial Results
Nedbank’s financial results for the financial year were heavily impacted by the sale of Togo-based ETI.
The group’s headline earnings per share increased by 2% to R17.2 billion, and return on equity reached 15.4% (2024: 15.8%).
The increase in headline earnings was driven by an improved impairment charge, while revenue growth was slow.
Associate income declined in the second half of the year, given the sale of its 21% shareholding in ETI.
The group also reported a higher expense base due to a once-off settlement with Transnet.
Notably, the group’s basic earnings per share declined by 53% to 1,681 cents per share. The group previously said that the earnings would be affected by the sale of ETI.
Nedbank previously said that IFRS accounting standards required that the cumulative foreign exchange and fair value losses arising from the equity accounting treatment of its interest in ETI be recognised in profit or loss in 2025.
This marks a change, as the accounting treatment for ETI was previously recognised in other comprehensive income.
The recycling of the cumulative foreign exchange and fair value losses recognised via other comprehensive income (OCI) is excluded from headline earnings per share and diluted headline earnings per share.
The group said its balance sheet metrics were strong, enabling it to declare a final dividend of 1,104 cents per share.
Looking ahead, strong underlying growth momentum across all its businesses will be partially offset by the normalisation of wholesale impairments from a low 2025 base.
Endowment pressure from lower interest rates and associated income from ETI will also not repeat.
ROE for 2026 is likely to be above 15%, heading towards 2025 levels, and above a lower COE of 14.0%.
The group expects ROE to build in the medium term to around 17%, supported by stronger revenue growth and a well-managed expense base.
| Metric | 2025 | 2024 | % Change |
|---|---|---|---|
| Headline earnings (Rm) | 17 200 | 16 934 | +2% |
| Revenue (Rm) | 73 924 | 71 721 | +3% |
| Credit loss ratio (bps) | 68 | 87 | – |
| Expenses (Rm) | 43 395 | 40 577 | +7% |
| Cost-to-income ratio (%) | 57.8% | 55.6% | – |
| Diluted headline earnings per share (cents) | 3 628 | 3 538 | +3% |
| Headline earnings per share (cents) | 3 706 | 3 631 | +2% |
| Basic earnings per share (cents) | 1 681 | 3 610 | –53% |
| Final dividend per share (cents) | 1 104 | 1 104 | 0% |
| Full-year dividend per share (cents) | 2 132 | 2 075 | +3% |
| Net asset value per share (cents) | 24 956 | 24 039 | +4% |
| Common-equity tier 1 ratio (%) | 12.9% | 13.3% | – |
Article amended with regard to information on OCI.
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