Nedbank ends 17-year alliance with Ecobank amid strategic shift

Nedbank Group is ending a 17-year strategic alliance with Ecobank Transnational Incorporated (ETI), and interested parties are being canvassed about buying the local bank’s 21.2% stake in the pan-African lender.

Nedbank CE Jason Quinn said Tuesday at the release of the bank’s interim results to June 30 that a review of the investment was conducted, recognising the risks of continuing to hold onto the investment due to regulatory uncertainty and potential increasing capital requirements. The Lomé, Togo-based ETI operates in over 30 African countries.

As a result of the review, the financial investment in ETI has been classified as a non-current asset held for sale from June 30, 2025,” said Quinn.

“The board has approved a formal plan to dispose of the investment, and we are currently engaging interested parties...This change represents a reset of Nedbank's strategy on the rest of the continent, with a clear focus on the SADC and East Africa regions in businesses we own and control, and in areas where we can play to our strengths,” he said.

Meanwhile, Nedbank’s share price fell sharply by 4.92% to R236.40 on Tuesday after its half-year results showed earnings guidance for the full year was downgraded due to the negative impact of the “more difficult than expected” South African environment on the bank's revenue, and considering the change of strategy regarding ETI.

Quinn said they now expect the return on equity to end the year around 15% (the bank had previously predicted 16%). Diluted headline earnings per share (DHEPS) are predicted to be in the low single digits.

In the interim period, headline earnings (HE) increased by 6% to R8.4bn, and the ROE improved slightly to 15.2% from 15%.

The increase HE was driven by non-interest revenue (NIR) and associate income growth, an ongoing improvement in the impairment charge, and good management of expenses, partially offset by muted net interest income (NII) growth.

“Uncertainty relating to US policies, and geopolitical conflicts resulted in significant financial market volatility and reduced business confidence. In South Africa, economic recovery slowed... Against this backdrop, we did well to increase our diluted earnings per share by 7%,” said Quinn.

An interim dividend of 1,028 cents per share was declared, up by 6%.

Following the announcement of a restructure of the Retail and Business Banking (RBB) and Wealth Clusters, the formation of the Personal and Private Banking (PPB) Cluster had been completed, led by Ciko Thomas as Managing Executive, and the appointment of Andiswa Bata as Managing Executive of Business and Commercial Banking (BCB).

Retail active and main-banked clients grew by 6% to 7.3 million and 3.8 million respectively. The Nedbank Africa Regions client base increased by 11% to over 419 000, of which around 163 000 were main-banked, and the 24% market share in SME clients was retained.

Digital volumes grew at double digits. Retail digital transaction volumes and values in South Africa grew by 15% and 16%, respectively. Digitally active retail clients increased by 8% to 3.2 million, representing more than 70% of retail main-banked clients.

Nedbank Money app active clients increased by 10% to 2.8 million, while transaction volumes increased by 16% and transaction values increased by 14%. Nedbank Money App (Africa) users reported a 17% increase in app usage.

Under strategic portfolio tilt, Nedbank increased market share in retail and commercial deposits, home loans, and vehicle finance.

“Lending that supports sustainable development finance increased to R189bn, including strong growth in renewable energy exposures to R47bn, where we are market leaders,” said Quinn.

He noted that the global economic outlook remains subdued. Increased consumer spending, subdued inflation, reduced interest rates, and continued withdrawals from contractional savings may boost the South Africa economy, he said.

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