The Nedbank Group has reported a financial performance that reflects headline earnings growth consistent with management’s internal projections for the ten months ending in October. This growth trajectory was primarily propelled by several key financial drivers, including higher levels of net interest income (NII) and non-interest revenue (NIR), a substantial reduction in the impairment charge, and the successful management of the group’s overall expense base, according to the voluntary trading update released by the banking group. This guidance, however, explicitly excludes the impact of a significant one-off expense relating to a commercial settlement with the state-owned enterprise, Transnet.
Transnet Settlement Context
The settlement in question saw Nedbank agree to pay Transnet R600 million, recorded as a one-off expense within the Corporate and Investment Banking (CIB) division, to avert prolonged and costly litigation. This move followed a long-standing dispute where Transnet insisted the bank was responsible for losses stemming from complex interest-rate swap deals concluded over a decade ago, transactions which ultimately benefited the Gupta-linked firm Regiments Capital. Nedbank entered into the settlement without any admission of liability. The state-owned entity, along with the Special Investigating Unit (SIU), had previously launched a R2.8 billion lawsuit against the bank after mediation talks collapsed, largely due to Transnet’s demand that Nedbank admit to corrupt conduct concerning the interest rate swap transactions carried out in 2015 and 2016. Nedbank had consistently countered the lawsuit by asserting its unwillingness to take responsibility for the governance failures that facilitated the alleged looting of Transnet’s coffers by Regiments Capital and associated entities. Notably, the interest rate swap transactions were scrutinised in the report by the judicial commission of inquiry into State Capture, Corruption, and Fraud, chaired by former Chief Justice Raymond Zondo, who recommended that specific transactions involving Nedbank and Regiments be subjected to further investigation.
Financial and Operational Strength
For the period under review, Nedbank reported NII growth in the low-to-mid single digits, a marginal acceleration compared to the 2% growth recorded in the first half of the year. This momentum is expected to result in full-year NII growth remaining within the previously guided range of low-to-mid single digits. Growth in gross banking advances within CIB surpassed the mid-single digit range, supported by strong project pipelines, though drawdowns are increasingly being deferred into 2026. Momentum continued in Personal and Private Banking, with advances growing in the mid-to-upper single digits, largely sustained by strong front-book growth in secured lending portfolios. Furthermore, Nedbank reported that its deposit growth remained deliberately ahead of its loan growth, underpinned by consistent market share gains in the retail deposit segment.
A significant highlight of the update was the continued improvement in the group’s impairment charge, which exceeded management expectations. The annualised credit loss ratio (CLR) improved to below the middle of the group’s through-the-cycle (TTC) target range of 60 to 100 basis points (bps). The full-year guidance for the CLR is now projected to be below the midpoint of this target range, signalling a healthier credit environment and effective risk management.
Conversely, NIR growth was slightly below mid-single digits. This result, while driven by solid trading revenues and positive underlying insurance growth, was partially offset by negative fair value adjustments and delays in deal flow within the CIB division. Full-year NIR growth is also expected to remain below the mid-single digit level. Expense growth, excluding the R600 million Transnet settlement, is projected to be in line with the previous guidance of above mid-single digits for the full financial year. Excluding the impact of the one-off settlement, the group anticipates achieving underlying diluted headline earnings per share (DHEPS) growth of flat to low single digits, alongside a return on equity (ROE) of 15% or higher for the full 2025 financial year. In further efforts to enhance shareholder value, Nedbank repurchased and cancelled 10.54 million shares, valued at R2.4 billion, during the year to date.
Strategic Initiatives and Market Outlook
Nedbank also provided updates on its strategic transactions, confirming the successful acquisition of the fintech innovator iKhokha. Furthermore, the disposal of its financial investment in Ecobank Transnational Incorporated to Bosquet is progressing, awaiting final regulatory approvals in the relevant jurisdictions. The group noted that while the South African operating environment remained challenging in the second half of the year, prospects have recently improved. The bank expects that an environment characterised by subdued inflation and lower interest rates will be sufficient to support a more convincing recovery in household credit demand in the near term.
Significantly, the group highlighted that the South African investment environment has seen tangible improvements, attributed to several key policy achievements. These include demonstrable progress on structural reforms, the nation’s successful removal from the Financial Action Task Force (FATF) greylist—a major boost to investor confidence and international banking relations—its hosting of the G20 Leaders’ Summit, and continued fiscal discipline by the government. Further supporting this optimism, S&P Global Ratings upgraded South Africa’s long-term foreign currency credit rating, as reported by the Rating Agency. These combined factors point toward an increasingly stable and attractive landscape for both domestic and foreign capital.
Nedbank is scheduled to release its annual results on 3 March 2026.