The operating environment during the first half of the year was challenging. Uncertainty around US policies, especially tariffs and ongoing geopolitical conflicts, caused significant volatility in financial markets. These factors also reduced business confidence.
In South Africa, the momentum of economic recovery slowed. As a result, real GDP growth declined to 0.1% in Q1 2025. However, structural reforms contributed to a more stable electricity supply. They also led to moderate improvements in logistics. Nevertheless, challenges with water supply, municipal services, crime and corruption persist.
Growth in corporate loans and advances
Despite low business confidence, limited fixed investment and an uncertain economic outlook, corporate loans and advances grew. Growth reached 8.1% in June. Inflation remained below the SARB’s 4.5% target. Consequently, the Monetary Policy Committee reduced rates by 25 basis points in January, May and July. This brought the repo rate to 7.00%. Even with this rate reduction, household credit growth remained muted at 3.1%. However, consumer finances continue to improve steadily.
Within this context, Nedbank Group’s headline earnings (HE) for the first six months of 2025 increased by 6% to R8.4 billion. The group’s return on equity (ROE) improved slightly to 15.2%, compared to 15.0% in H1 2024. Non-interest revenue (NIR) and associate income drove the increase in HE. This was further supported by a continued improvement in impairment charges and solid cost control. However, muted net interest income (NII) growth partially offset these gains.
The balance sheet metrics remained strong. This strength enabled us to declare an interim dividend of 1,028 cents per share. This represents a 6% increase and a payout ratio of 57%.
Organisational restructuring of retail and business banking
The Nedbank Group successfully completed the organisational restructuring of its Retail and Business Banking (RBB) and Nedbank Wealth Clusters. This was done on time and according to plan. Starting 1 July 2025, Personal and Private Banking (PPB) will serve all individual clients. This includes youth, entry-level, middle, affluent and high-net-worth segments. PPB will provide a full suite of solutions to these clients. Business and Commercial Banking (BCB) will focus on juristic clients. It will serve SME, commercial and mid-corporate segments.
All stakeholders, including colleagues, clients and shareholders, have responded positively to these changes. Key leadership roles have been filled. The focus now shifts to execution. This includes unlocking transformational growth, enhancing efficiency and improving productivity.
Following a strategic review by the board and management, the Nedbank Group reclassified its financial investment in Ecobank Transnational Incorporated (ETI). It is now recognised as a non-current asset held for sale under IFRS 5. The board has approved a formal plan to dispose of the investment. The group is currently engaging interested parties. This decision marks a strategic reset. Nedbank will now focus on the SADC and East Africa regions. The priority will be businesses that they own and control.
Growth in digital transaction volumes and values
The Nedbank Group also made good progress on its strategic value unlocks. Digital transaction volumes and values grew at double-digit rates. Digital sales now account for 70% of all sales. Client satisfaction remained at the top end of market benchmarks and among our peers. The group’s brand value also increased significantly.
Retail active and main-banked client numbers grew reasonably, each by 6%. The Nedbank Africa Regions client base grew by 11%. Despite increased competition, the group maintained its 24% market share among SME clients. Under their strategic portfolio tilt, they gained market share in home loans, vehicle finance and retail and commercial deposits since December 2024.
The Nedbank Group’s increased focus on payments and insurance also delivered strong growth in product volumes. Nedbank expanded lending that supports sustainable development finance and creates a positive impact. This lending, aligned with the United Nations Sustainable Development Goals, grew to R189 billion. It includes R47 billion in renewable energy exposures.
Looking ahead
The global economic outlook remains subdued, and risks are elevated. US tariffs are expected to dampen business confidence, capital investment, global trade volumes, supply chains and export volumes in many countries.
In South Africa, the economic recovery is expected to improve. This will be supported by increased consumer spending. Factors driving this include higher real incomes, low inflation, reduced interest rates and ongoing withdrawals from contractional savings. However, 30% tariffs on SA exports to the US, weaker global growth and stagnant commodity prices will likely reduce business confidence. These factors may hurt exports and discourage private sector fixed investment.
The Nedbank Group forecasts GDP growth of 1.0% for 2025, followed by 1.5% in 2026. However, downside risks remain. After the 25 bps interest rate cut in July 2025, interest rates are expected to stabilise. Banking conditions should gradually improve throughout the year. Credit growth is also expected to rise, supported by the recovery in the domestic economy and lower interest rates.
Due to the more difficult-than-expected South African environment and Nedbank’s strategic change regarding ETI, the group has revised its 2025 guidance. Nedbank now expects DHEPS growth to be in the low single digits. ROE is projected to end the year at around 15%.
Growth initiatives and active capital management
Looking forward, the Nedbank Group aims to increase the group’s ROE to 17% in the medium term. This target is supported by growth initiatives and active capital management. These efforts will help offset the negative impact of ETI on ROE. In the long term, Nedbank remain committed to achieving an ROE of more than 18%.
I would like to thank all Nedbankers for their dedication and resilience, particularly during the recent organisational restructure. We also appreciate the support of our 7.9 million retail and wholesale clients who continue to choose Nedbank. Finally, we thank the investment community, regulators, and all other stakeholders for their ongoing support. As Nedbank, we will continue to fulfil our purpose. We use our financial expertise to do good.
Jason Quinn, Chief Executive
INTERIM RESULTS
Interim dividend declaration
Notice is hereby given that an interim dividend of 1,028 cents per ordinary share has been declared. This applies to shareholders for the six months ended 30 June 2025. The dividend is declared from income reserves.
A dividend withholding tax rate of 20% (applicable in SA) will apply. This amounts to 205.6 cents per ordinary share. As a result, the net dividend is 822.4 cents per ordinary share. This applies unless a shareholder is exempt from dividend tax or qualifies for a reduced rate under a double-taxation agreement.
Nedbank Group’s tax reference number is 9375/082/71/7. As at the date of declaration, the number of ordinary shares in issue was 485 752 174.
In line with Strate, the electronic settlement and custody system used by JSE Limited, the relevant dividend dates are:
| EVENT | DATE |
|---|---|
| Last day to trade (cum dividend) | Tuesday, 2 September 2025 |
| Shares commence trading (ex dividend) | Wednesday, 3 September 2025 |
| Record date | Friday, 5 September 2025 |
| Payment date | Monday, 8 September 2025 |
Share certificates may not be dematerialised or rematerialised between Wednesday, 3 September 2025, and Friday, 5 September 2025 (inclusive).
Where applicable, dividends for certificated shares will be transferred electronically on the payment date. If shareholders have not provided banking details, the dividend will be withheld until this information is received. Dematerialised shareholders will have their accounts credited at their participant or broker on Monday, 8 September 2025.
* These targets are not profit forecasts and have not been reviewed or reported on by the group’s joint auditors.
