Nedbank Group (NED) investor relations material

Executive summary

• 2025 was a transformative year, marked by strategic reorganization, full acquisition of iKhokha, Eqstra integration, sale of a 21% stake in ETI, and an offer to acquire a controlling stake in NCBA Group, focusing on growth in Southern and East Africa.

• Operating environment improved in H2, with cautious optimism, better macroeconomic conditions, and increased private sector investment.

• Digital transformation accelerated, with 73% of PBB sales via digital channels and strong growth in app usage.

• Sustainable development finance exposures reached ZAR 207 billion, achieving the 2025 target.

• Concluded a ZAR 600m Transnet settlement, avoiding litigation and supporting infrastructure investment.

Financial highlights

• Headline earnings up 2% to R17.2bn; DHEPS up 3% to 3628 cents; ROE at 15.4% (above COE of 14.6%), but down from 15.8% in 2024.

• Gross advances grew 6% to R997bn; deposits up 11% to R1,306bn; NII up 3% despite NIM compression; NIR up 4%.

• Credit loss ratio improved to 68 bps (from 87 bps in 2024), with impairments down 18%.

• Dividend of ZAR 21.32/share (final DPS 1104 cents, payout ratio 58%); CET1 ratio at 12.9%, above target range.

• Cost-to-income ratio increased to 57.8%, under pressure from slow revenue growth; new productivity initiatives identified (ZAR 1.5bn+).

Outlook and guidance

• 2026 guidance: NII and NIR growth in mid-single digits, NIM to contract slightly, CLR to normalize to mid-70 bps, no further ETI associate income.

• ROE expected above 15% in 2026, targeting 17% medium-term; cost-to-income ratio to improve, CET1 ratio to remain within 11.0–12.5% target.

• Medium-term targets: DHEPS growth > CPI + GDP + 3%, ROE > 17%, CIR to 54%.