Nedbank Group has reported a 2% increase in headline earnings to R17.2 billion for the year ended 31 December 2025, as it concluded the sale of its Ecobank stake, absorbed a once-off Transnet settlement and set out new expansion plans in East Africa.
Diluted headline earnings per share (Heps) rose 3% to 3 628 cents, while return on equity eased to 15.4% from 15.8% in the prior year.
The group declared a final dividend of 1 104 cents per share, unchanged from last year, taking the full-year dividend to 2 132 cents – up 3%.
The results reflect what chief executive Jason Quinn described as a “transformative year”, marked by strategic portfolio changes and a reset of the bank’s African ambitions.
Ecobank exit
Associate income fell in the second half after Nedbank disposed of its 21% stake in Ecobank Transnational Incorporated (ETI) in December.
The sale, concluded on 17 December 2025 for $100 million (R1.6 billion), forms part of a strategic reset with a tighter focus on the Southern African Development Community and East Africa.
The ETI disposal lowered associate earnings and will not recur in 2026.
Read: Nedbank flags 20% earnings drop after Ecobank exit
Acquisitions
In the first quarter of 2026, Nedbank announced its intention to acquire a controlling interest in NCBA Group plc in Kenya for an estimated total consideration of R13.9 billion.
The proposed transaction is aimed at strengthening the group’s presence in East Africa and aligns with its revised regional focus following the Ecobank exit.
Nedbank also entered into a binding agreement in August 2025 to acquire 100% of fintech company iKhokha for about R1.605 billion, subject to adjustments and regulatory approvals, which were finalised with effect from 1 December 2025.
iKhokha will continue to operate independently under its existing brand and leadership.
The fintech serves hundreds of thousands of entrepreneurs and processes more than R20 billion in digital payments annually, according to Nedbank.
Read: Nedbank to pay Transnet R600m to settle swap dispute
Transnet settlement
Group expenses increased 7% to R43.4 billion, pushing the cost-to-income ratio to 57.8% from 55.6%.
The higher expense base was partly attributable to a once-off settlement with Transnet.
Nedbank reached a confidential commercial settlement with Transnet at the end of 2025 to resolve the long-running litigation regarding interest-rate swap transactions with Nedbank.
The lender agreed to pay Transnet R600 million on a no-admission-of-liability basis.
“The settlement enables both parties to preserve their longstanding relationship and focus on South Africa’s infrastructure and economic growth. Nedbank remains confident in its internal governance relating to the original transactions,” it said in the results announcement.
Lower impairment
Despite slower revenue growth of 3% to R73.9 billion, headline earnings were supported by a lower impairment charge, with the credit loss ratio improving to 68 basis points from 87 basis points in 2024.
Basic earnings per share fell sharply by 53% to 1 681 cents, reflecting the impact of non-headline items.
Capital and balance sheet metrics were strong, with a common-equity tier 1 ratio of 12.9%. Net asset value per share increased 4% to 24 956 cents.
Operating environment and guidance
Nedbank notes that the domestic operating environment improved in 2025, with South Africa’s real GDP growth more than doubling to 1.2% year on year over the first three quarters.
Inflation averaged 3.2% and the South African Reserve Bank cut the repo rate by a cumulative 150 basis points from its August 2024 peak, bringing it to 6.75% by year-end.
For 2026, the group expects stronger underlying growth momentum across its businesses. However, this will be partly offset by a normalisation of wholesale impairments off a low 2025 base, endowment pressure from lower interest rates and the absence of associate income from ETI.
Return on equity for 2026 is likely to remain above 15% and above a lower cost of equity of 14%, “heading towards 2025 levels”.
Over the medium term, Nedbank expects ROE to build to around 17%, “supported by stronger revenue growth and a well-managed expense base”. – moneyweb.co.za
