Nedbank delivers improved financial performance. Positions itself for growth with realignment of business banking and wealth divisions
Published - 4 March 2025
Salient features
- Headline earnings increased by 8% to R16,9bn.
- ROE increased to 15,8%
- Capital and liquidity ratios strong with CET1 of 13,3% and tier 1 capital ratio of 15,1%.
- Strong growth in digital clients and volumes
- Organisational restructure to unlock new growth opportunities
- Final dividend of 1 104 cents, up 8%
Nedbank Group delivered an improved financial performance for the year ended 31 December 2024 as headline earnings increased by 8% to R16,9bn, diluted headline earnings per share increased by 11%, and the group’s ROE strengthened to 15,8%, from 15,1% in the prior period, reflecting steady progress towards its ROE targets.
Headline earnings growth was underpinned by good non-interest revenue growth, a lower impairment charge and targeted expense management, offsetting muted net interest income growth given slower loan growth and margin pressure. Balance sheet metrics all remained very strong, enabling the declaration of a final dividend of 1 104 cents per share, up by 8% at a payout ratio of 57%.
Nedbank CE Jason Quinn highlighted that despite a challenging economic environment, the bank achieved significant successes from a strategic perspective. “A key highlight of 2024 was the fundamental completion of our Managed Evolution IT transformation, which has delivered a refreshed and modern technology platform. This platform, along with our enhanced digital capabilities, supported ongoing strong digital growth, market-leading client satisfaction metrics, solid main-banked client gains, and higher levels of cross-sell.”
“With our strategic portfolio tilt, we achieved market share gains in key areas such as home loans, vehicle finance, wholesale term-lending and retail deposits. We also continued to make strides in creating positive impacts through R183bn of lending that supports sustainable development finance, aligned with the United Nations Sustainable Development Goals. The increase in renewable energy exposures of 32% to almost R40bn, and Nedbank being awarded significant renewable energy mandates in Q4 2024, reinforce our leadership in this space.”
These achievements, among others, led to Nedbank being named SA Bank of the Year by the prestigious magazine, The Banker.
Organisational restructure to provide substantial benefits
To sharpen execution of the Nedbank strategy, compete more effectively in the market, enhance cross-sell and unlock new growth opportunities, the bank has embarked on an organisational restructure of its Retail and Business Banking (RBB) and Nedbank Wealth clusters, evolving into an organisational design more focused on client centricity.
The new group structure will see the creation of Personal and Private Banking (PPB), an individual/non-juristic focused cluster, that will provide a full suite of solutions to individual clients across the youth, entry-level, mass, middle, affluent and high-net-worth segments. The reorganisation will also see the creation of Business and Commercial Banking (BCB), a juristic-focused cluster, that will cover the spectrum of SME, Commercial and Mid-corp clients, to unlock accelerated growth opportunities through new compelling value propositions, while elevating this business to a group executive level.
As part of the reorganisation, Nedbank Insurance and Nedbank Wealth Management will be incorporated into PPB as the group seeks to grow insurance and unlock cross and upsell opportunities into the existing Nedbank client base, create scale, leverage capability synergies between Wealth Management and Private Clients to strengthen the group’s value position in the market. The Asset Management business will move into Corporate Investment Banking and focus on building out its product offerings while improving new business origination on the back of our new client-centric model. Nedbank Wealth will no longer exist as a stand-alone cluster.
“We anticipate substantial benefits for all our stakeholders. Employees will be more empowered as we break down structural barriers to collaboration, create increased focus and align incentives across the organisation.”
“For clients, the reorganisation represents a transformative leap forward in how they will experience Nedbank. By unifying our personal and juristic business segments into distinct, focused clusters, we will be able to offer more seamless and integrated banking experiences. Clients will benefit from relevant holistic financial solutions, enhanced client service, more tailored business solutions from BCB, greater access to financial expertise in PPB, and increased investment and innovation in product offerings enabled by efficiencies and accelerated growth.”
“Our shareholders can expect improving financial performance from Nedbank over time, underpinned by delivering of focused growth strategies, including the unlock of cross-sell opportunities and increased productivity. Streamlining our operations and creating increased segment focus, would contribute to us achieving our long-term ROE of greater than 18%,” Quinn said.
The changes will become effective from 1 July 2025.
Winning digitally
Retail digital transaction volumes and values in SA grew by 12%. Digitally active retail clients increased by 7% to 3,1 million, representing 70% of retail main-banked clients, while digitally active clients across the NAR business increased from 64% to 72% of its total active client base. Active Nedbank Money app clients increased by 14% to 2,7 million in 2024, while transaction volumes increased by 16% and transaction values increased by 21%.
These digital innovations support high levels of client satisfaction, as demonstrated by Nedbank’s Net Promoter Score (NPS), which ranked #1 among the large South African banks in 2024 (Kantar survey) when surveying all clients.
Outlook
Looking forward, Nedbank remains cautiously optimistic and expects the economic environment in SA to improve off a low 2024 base, although risks associated with global geopolitics and trade wars remain.
SA’s GDP is forecast to increase by 1,4% in 2025, inflation to remain well within the SARB target range of 3% to 6%, and the South African prime lending rate to decline by a further 50 bps in 2025, reaching 10,75%. Corporate lending should pick up while growth in household lending is expected to remain muted, only picking up in the second half of the year. The risks are however to the downside.
“Our improved financial performance in 2024 – together with the progress made in executing on our strategy, our new transform agenda and better economic prospects – gives us confidence that we will continue to make progress to increase our ROE to greater than 16% in 2025, greater than 17% in the medium term and above 18% in the longer term.”
“I am extremely comfortable with the strong foundations that Nedbank has built, including strong capital and liquidity levels, a strong and vibrant culture, a focus on transformation (diversity, equity and inclusion), leading ESG credentials and significant investments in technology, all culminating in exciting prospects for the group,” Quinn said.
For a detailed breakdown of business unit performance, please refer to SENS announcement and analyst booklet.
Nedbank Group Integrated Communications
Annaleigh Vallie
Phone: +27 (0)66 479 0936
Email: annaleighv@nedbank.co.za
Joanne Isaacs
Phone: +27 (0)78 800 4989
Email: joannei@nedbank.co.za
About Nedbank Group
Nedbank Group is a bank holding company listed on the JSE Limited, with a market capitalisation of R137bn as at 31 December 2024. Nedbank is one of Africa’s largest banking groups, with operations in South Africa, Namibia, Eswatini, Mozambique, Lesotho and Zimbabwe, and offshore in the Isle of Man and Jersey. It also has representative offices in other Africa countries, including Kenya, and has key global financial centres to provide international banking services for SA-based multinational and high-net-worth clients in London and Dubai. The group is a diversified financial services provider, offering a wide range of wholesale and retail banking and financial services. Nedbank has maintained its level 1 BBBEE status for the past 7 years and rates in the top quartile of local and international banks on ESG scores. group.nedbank.co.za
