Nedbank Group reported a 2% increase in headline earnings to R17.2 billion for the year ended Dec. 31, 2025, as it completed the sale of its Ecobank stake and settled a dispute with Transnet.
Diluted headline earnings per share rose 3% to 3,628 cents. Return on equity eased to 15.4% from 15.8%. The bank declared a final dividend of 1,104 cents per share, taking the full-year payout to 2,132 cents, up 3%.
Revenue increased 3% to R73.9 billion. Impairments declined, with the credit loss ratio improving to 68 basis points from 87 basis points in 2024. Basic earnings per share fell 53% to 1,681 cents due to non-headline items.
Expenses rose 7% to R43.4 billion, pushing the cost-to-income ratio to 57.8%. The increase included a R600 million settlement with Transnet linked to interest-rate swap litigation. The bank said the payment was made without admission of liability.
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In December, Nedbank sold its 21% stake in Ecobank Transnational Incorporated for $100 million. The disposal reduced associate income and will not recur in 2026.
The bank announced plans in January 2026 to acquire about 66% of Kenya's NCBA Group for an estimated R13.9 billion. In August 2025, it agreed to buy fintech iKhokha for about R1.605 billion. The deal closed on Dec. 1. iKhokha processes more than R20 billion in digital payments a year.
South Africa's economy grew 1.2% over the first three quarters of 2025. Inflation averaged 3.2%, and the central bank cut rates by 150 basis points to 6.75%.
Key Takeaways
Nedbank's results reflect a shift in regional strategy and capital allocation. The Ecobank exit signals a move away from a broad pan-African model toward a focus on Southern Africa and East Africa. The planned NCBA acquisition would give Nedbank a larger presence in Kenya, one of the region's main banking markets. Kenya's financial sector has seen consolidation and expansion into digital services, supported by high mobile money usage. The purchase of iKhokha adds exposure to small-business payments and merchant services. Digital payments in South Africa and across the continent continue to grow as cash usage declines. Lower impairments supported earnings in 2025. However, the bank expects wholesale impairments to normalize in 2026 and associate income from Ecobank to fall away. Capital remains solid, with a common-equity tier 1 ratio of 12.9%. Management expects return on equity to remain above 15% in 2026 and target about 17% over the medium term, supported by revenue growth and cost control. The strategy points to selective expansion, digital scale and tighter geographic focus as drivers of future earnings.
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