Nedbank Group (NED) H2 2024 earnings summary

Executive summary

• 2024 saw improved financial performance with headline earnings up 8% to R16.9bn, diluted HEPS up 11%, and ROE at 15.8%, driven by strong NIR growth, lower impairments, and targeted expense management, despite a challenging macro environment.

• Strategic focus on execution under the Perform and Transform Agendas, leveraging technology investments, digital leadership, and sustainable development finance to target long-term ROE above 18%.

• Seamless leadership transition and major organizational restructure to enhance client-centricity and unlock cross-sell opportunities.

• Final dividend per share increased by 8% to 1104 cents, with a 57% payout ratio.

Financial highlights

• Headline earnings grew 8%, DHEPS up 11%, and final dividend per share increased by 8% to 1104 cents.

• Gross banking advances grew 7% to R944bn, deposits up 8% to R1.175tn.

• NIR increased by 10%, NII up 1%, and impairments reduced by 17%.

• Cost-to-income ratio at 55.9%, impacted by muted NII growth.

• CET1 ratio at 13.3%, above the board target range; LCR at 135%, NSFR at 116%.

Outlook and guidance

• 2025 guidance: NII growth expected in mid-single digits, NIR in upper single digits, expense growth in mid-to-upper single digits, and CLR around the midpoint of the 60–100 bps target range.

• ROE targeted above 16% in 2025, progressing to above 17% medium term and 18% long term.

• Cost-to-income ratio to decline to 54% medium term and below 50% long term.

• CET1 ratio to remain above target range, with dividends at the top end of the payout ratio.