Nedbank: A Transformational Year in 2025 With Digital Growth and Strategic Expansion

The year 2025 marked a turning point for Nedbank, solidifying its position in the South African financial sector through a combination of strong operational performance and bold strategic decisions. The banking group reported performance figures with substantial growth driven by its integrated digital platform, while simultaneously executing significant internal restructuring and completing large-scale M&A moves to reposition its continental strategy.

Financial Results 2025: Strength with Opportunities

During the year ended December 31, 2025, Nedbank experienced a 3% increase in its diluted earnings per share (HEPS), the preferred performance indicator in South Africa. Core earnings grew 2%, reaching R17.2 billion, largely supported by improvements in credit impairment provisions.

The group’s return on investment (ROI) remained robust at 15.4%, compared to 15.8% in 2024, clearly staying above the established cost of equity (COE) of 14.2% for the period. This performance allowed the bank to declare a final dividend of 1,104 cents per share, rewarding shareholder confidence.

However, revenue growth was moderate in 2025. Associate income contracted in the second half of the year mainly due to the divestment of Nedbank’s 21% stake in Ecobank Transnational Incorporated (ETI), a strategic decision within its repositioning in Africa. Additionally, expense structure increased due to a one-time agreement with Transnet, impacting overall profitability for the period.

Expanding Digital Ecosystem: Key Milestones in 2025

Nedbank’s strategic growth engine in 2025 was its integrated digital ecosystem. The Avo platform reached significant penetration with over 700,000 active Nedbank Greenbacks members. The gross merchandise value (GMV) generated by Greenbacks showed exceptional dynamism, growing 35% during the year, reflecting widespread adoption of digital payment solutions and rewards services.

This growth was supported by technological improvements implemented throughout 2025, including new currency exchange functionalities, access to instant EFT transfers, and a completely redesigned travel experience. These components worked synergistically to enhance the value proposition offered to users.

The Avo Auto business line achieved a particularly notable milestone by surpassing R1 billion in cumulative auto sales volume since its launch. Since the Avo SuperShop platform was launched in 2020, the ecosystem has attracted over 24,000 merchants selling their products and services through the digital channel, creating a significant network effect.

Organizational Transformation and Key Strategic Moves

In pursuit of a more agile, customer-focused structure, Nedbank carried out a fundamental organizational restructuring in 2025. The previous architecture, which grouped Retail and Business Banking (RBB) along with Nedbank Wealth, was dismantled and rebuilt around two clusters: Personal and Private Banking (PPB) and Business and Commercial Banking (BCB). This transformation, effective from July 1, 2025, was well received by stakeholders, with key leaders appointed and a growing momentum in underlying operational metrics.

Beyond internal reorganization, Nedbank completed major corporate moves. In a move aimed at strengthening its technological capacity, the bank acquired 100% of iKhokha, a South African fintech company specializing in payment solutions. This integration aims to accelerate Nedbank’s support for small and medium-sized enterprises through digital innovation and more inclusive financial products.

Meanwhile, Nedbank divested its entire stake in Ecobank Transnational Incorporated in December 2025, marking a strategic shift in its African focus. This divestment is part of a broader reconfiguration of the group’s continental presence, now focusing selectively on the SADC and East Africa regions.

In line with this new direction, Nedbank announced in the first quarter of 2026 its intention to acquire a majority stake in NCBA Group plc, a prominent financial institution in East Africa, with an estimated valuation of R13.9 billion. This planned transaction underscores Nedbank’s commitment to positioning itself as a key financial player in high-potential markets.

Outlook for 2026: Growth Expectations with Adjustments

Jason Quinn, Group CEO of Nedbank, outlined expectations for the 2026 financial year. The bank anticipates that the strong operational growth momentum seen across all its units will be partly offset by the normalization of wholesale credit impairments from a low base recorded in 2025, pressure on interest margins due to a lower interest rate environment, and associate income from ETI that will not materialize again in 2026.

Despite these headwinds, management projects that ROI for 2026 will remain above 15%, converging toward similar levels as 2025, while again exceeding a revised lower COE of 14.0%. The bank’s medium-term vision aims for a gradual build-up of ROI to around 17%, supported by strengthened revenue streams. This profitability trajectory will reflect the cumulative benefits of the strategic transformation initiated in 2025 and expansion into higher-potential emerging markets.