Nedbank Group (NED) Trading Update summary

Executive summary

• Robust fee and commission growth in PPB driven by value-added services, client gains, and cross-sell post-restructure.

• Headline earnings for the 10 months to 31 October 2025 grew in line with management expectations, supported by higher net interest income, non-interest revenue, lower impairments, and well-managed expenses.

• Non-interest revenue growth revised to below mid-single digits due to delayed CIB deal flow and base effects.

• Underlying DHEPS growth expected to be flat to low single digits, with ROE at or slightly above 15%.

• CET1 capital adequacy ratio remains above the Board-approved target range, with strong liquidity metrics.

Trading performance and revenue trends

• PPB saw strong front book growth, especially in secured lending, with market share gains in home loans and motor vehicle finance.

• Net interest income grew at low- to mid-single digits, slightly above the 2% growth in H1 2025.

• Gross banking advances in CIB grew above mid-single digits, with strong pipelines extending into 2026.

• Personal and Private Banking advances maintained mid- to upper single-digit growth, driven by secured lending.

• Non-interest revenue growth was below mid-single digits, impacted by fair value adjustments and delayed dealflow in CIB.

Profitability and margins

• Expense growth moderated to mid to upper single digits, with full-year guidance above mid-single digits, excluding one-off items.

• Margins slightly below 387bps as of October; negative endowment impacts expected to be fully reflected by Q1 2026.

• Net interest margin declined slightly from 3.87% in H1 2025 due to lower interest rates.

• Annualised credit loss ratio improved to below the midpoint of the 60–100 bps target range.

• Endowment sensitivity remains at ZAR 1.3 billion per 1% rate move; some strategic hedging implemented.