Nedbank Group

For 2025, headline earnings increased 2% and diluted HEPS increased 3%; ROE was 15.4%, or 15.8% excluding the once-off ZAR 600 million Transnet settlement. Basic EPS decreased 53% because of the ETI disposal accounting. Gross banking advances grew 6%, deposits grew 11%, net interest margin fell 24 bps to 381 bps, noninterest revenue rose 4%, expenses increased 5% underlying / 7% reported, and the credit loss ratio improved to 68 bps. CET1 ended at 12.9%, net asset value per share was around ZAR 250, and the total dividend for the year was ZAR 21.32 per share. Management said 2026 NII should grow around mid-single digits, NIR should grow at upper single digits, expenses should be below mid-single digits, the credit loss ratio should be around the mid-70 bps level, and CET1 should return to the revised 11% to 12.5% target range by year-end. NCBA is expected to close in Q3 2026 and could reduce CET1 by about 30 to 40 bps; the FY26 guidance does not currently include NCBA from Q3.

Jason Paul Quinn framed 2025 as a transformative strategic year, emphasizing the reorganization into more client-focused clusters, the acquisition of iKhokha, the sale of ETI, and the planned NCBA deal. He sounded constructive on the operating backdrop, citing improving South African macro conditions, better sentiment, and early “green shoots” in corporate and consumer activity. At the same time, he was candid that 3% diluted HEPS growth was not satisfactory and that lower margins, ETI’s exit, and wholesale deal timing held back the year.

Michael Davis described performance as muted but slightly ahead of December pre-close guidance, with headline earnings up 2%, DHEPS up 3%, and ROE at 15.4%. He highlighted a 24 bps NIM decline to 381 bps, 11% deposit growth, 6% advances growth, 4% noninterest revenue growth, and an 18% improvement in impairments, with the credit loss ratio down to 68 bps. He also noted the ETI sale created a ZAR 8.6 billion non-headline item, that CET1 finished at 12.9%, and that NCBA is expected to consume about 30 to 40 bps of CET1 on current assumptions.

Analysts focused on the Middle East conflict, the pace of wholesale and CIB deal execution, the drivers of lower corporate market share, additional cost savings, buybacks, mortgage origination, NCBA economics, and the outlook for credit losses. Management said it was too early to change the outlook based on Middle East events, described CIB delays as client/timing driven rather than capability-driven, and said the ZAR 1.5 billion productivity program should be realized over about 3 years. On capital, they said further buybacks are less likely given stronger growth needs and the NCBA deal, and they reiterated that FY26 guidance does not yet include NCBA from Q3.