Nedbank expects a large drop in its basic earnings for the 2025 financial year following the sale of Togo-based finance group, Ecobank Transnational Incorporated (ETI). <\/p>\n\n\n\n
Last year, Nedbank announced it would sell ETI in a deal worth $100 million (R1.8 billion at the time), as the group cut back its exposure from West Africa. <\/p>\n\n\n\n
Nedbank acquired a 21.2% stake in ETI in October 2014 as it sought to expand outside South Africa.\u00a0<\/p>\n\n\n\n
However, the group said there were risks to continuing to hold the West African bank amid regulatory uncertainty and increased capital requirements. <\/p>\n\n\n\n
Nedbank decided to sell its stake in ETI to Bosquet Investments, the private investment vehicle of Monaco-based Alain Nkontchou, who had previously served as ETI’s chair.<\/p>\n\n\n\n
In a trading statement for the year, Nedbank has now announced that the sale will have a negative effect on the group’s basic earnings. <\/p>\n\n\n\n
IFRS accounting standards require 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. <\/p>\n\n\n\n
This marks a change, as the accounting treatment for ETI was previously recognised in other comprehensive income. <\/p>\n\n\n\n
With its results due next week, Tuesday, 3 March 2026, the group is now certain that the sale will have a significant impact on its earnings. <\/p>\n\n\n\n
The group expects basic earnings per share to drop by between 52% and 55%<\/strong>, to a range of 1,625 cents per share to 1,733 cents per share. <\/p>\n\n\n\n Notably, 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.<\/p>\n\n\n\n It also had no impact on net asset value (NAV) per share.<\/p>\n\n\n\n Headline earnings per share are thus expected to grow by 1% to 3%, to a range of 3,667 to 3,740 cents per share. The NAV per share should grow to a range of 24,760 cents to 25,241 cents.<\/p>\n\n\n\n The group’s return on equity, however, is expected to decline slightly, likely to a range of 15.3% to 15.5%. <\/p>\n\n\n\n While Nedbank gave ETI the boot, the bank is looking to acquire Kenya’s NCAB in a deal valued at around R13.9 billion. <\/p>\n\n\n\n NCBA has over 120 branches and serves over 60 million customers, making it the largest banking group in Africa by customer numbers.<\/p>\n\n\n\n The deal would see Nedbank acquire roughly 66% of NCBA, while the remaining 34% of NCBA shares will trade on the Nairobi Securities Exchange (NSE).<\/p>\n\n\n\nNedbank Financials<\/th> FY24<\/th> FY25 low<\/th> FY25 high<\/th><\/tr><\/thead> Basic EPS (cents)<\/td> 3 610<\/td> 1 625<\/td> 1 733<\/td><\/tr> YoY change<\/td> <\/td> (55%)<\/td> (52%)<\/td><\/tr> HEPS (cents)<\/td> 3 631<\/td> 3 667<\/td> 3 740<\/td><\/tr> YoY change<\/td> <\/td> +1%<\/td> +3%<\/td><\/tr> Diluted HEPS (cents)<\/td> 3 538<\/td> 3 538<\/td> 3 680<\/td><\/tr> YoY change<\/td> <\/td> 0%<\/td> +4%<\/td><\/tr> NAV per share (cents)<\/td> 24 039<\/td> 24 760<\/td> 25 241<\/td><\/tr> YoY change<\/td> <\/td> +3%<\/td> +5%<\/td><\/tr> ROE<\/td> 15.8%<\/td> 15.3%<\/td> 15.5%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Move to buy another international bank<\/h2>\n\n\n\n