Nedbank Group delivered a robust performance for the year ended December 31, 2024, reporting an 8% rise in headline earnings to R16.9 billion as the bank positions itself for future growth through a strategic reorganisation unveiled on Tuesday.
Nedbank CEO Jason Quinn said, “We anticipate substantial benefits for all our stakeholders. Employees will be more empowered as we break down structural barriers to collaboration, create increased focus and align incentives across the organisation.”
He said Nedbank's improved financial performance in 2024 - together with the progress made in executing on its strategy, its new transform agenda and better economic prospects "gives us confidence that we will continue to make progress to increase our ROE to greater than 16% in 2025, greater than 17% in the medium term and above 18% in the longer term".
To drive future growth, Nedbank unveiled a reorganisation of its Retail and Business Banking (RBB) and Nedbank Wealth clusters, effective July1, 2025. This creates Personal and Private Banking (PPB), serving individual clients from youth to high-net-worth segments, and Business and Commercial Banking (BCB), targeting SMEs to mid-tier corporates. Nedbank Insurance and Wealth Management will integrate into PPB to boost cross-sell opportunities, while Asset Management shifts to Corporate Investment Banking to expand product offerings. The standalone Nedbank Wealth cluster will end.
Executive appointments
Executive leadership changes were also announced on Tuesday concurrent with the strategic reorganisation of the group's Retail and Business Banking and Nedbank Wealth clusters.
Iolanda Ruggiero, the managing executive of Nedbank Wealth, will retire on March 31, 2025 after 23 years, having led wealth and insurance businesses since 2015. Daleen du Toit, the group chief compliance officer (CCO) since 2022, will retire on May 16, 2025 after a decade with the bank. Nomonde Hlongwa, an attorney with 18 years in financial services and currently CCO for Standard Bank’s Business and Commercial Banking, will succeed du Toit as CCO effective April 16, 2025, joining the Group Exco.
The bank’s new Transform agenda, launched as part of its 2024 strategy refresh, targets growth in untapped areas. It builds on the completion of the Target Operating Model 2.0, which delivered R3 billion in cost savings through headcount cuts and back-office optimisation. The agenda focuses on leveraging technology investments, including data and AI, to extract commercial value, alongside optimising end-to-end processes via Nedbank Intelligent Hyper Automation.
It also prioritises payment modernisation, cross-selling insurance to existing clients, and diversifying into East Africa using Corporate Investment Banking strengths. A dedicated offering for mid-sized corporates aims to transform their access to financial solutions, bolstering the bank’s transactional franchise.
Results
Nedbank said on Tuesday that it had to navigate a strained South African economy with 0.5% GDP growth, high interest rates, and crumbling infrastructure.It grew its earning despite a volatile rand, persistent power cuts, and logistics bottlenecks. However, a peaceful election and a Government of National Unity offered some stability in the second half.
Diluted headline earnings per share rose 11% to R35.38 from R31.99 in 2023, driven by strong non-interest revenue growth, a lower impairment charge, and tight expense control, despite muted net interest income growth from margin pressure and slower loan expansion.
Loans and advances showed household credit growth slowing to 3% by year-end, with corporate credit up 5.4%, though fixed-investment remained stagnant. The credit loss ratio improved to 87 basis points from 109 basis points, reflecting solid risk management.
Balance sheet resilience persisted, with a common-equity tier 1 (CET1) ratio of 13.3% and a tier 1 capital ratio of 15.1%. Nedbank declared a final dividend of R11.04 per share, up 8% from R10.22, at a 57% payout ratio, with full-year dividends reaching R20.75, a 10% rise from R18.93.
Operationally, digital progress advanced, with retail digital transaction volumes up 12% and digitally active retail clients rising 7% to 3.1 million, or 70% of main-banked retail clients. Nedbank Money app users grew 14% to 2.7 million, with transaction volumes up 16% and values up 21%.
Strategic lending included R183bn in sustainable development finance, with renewable energy exposures climbing 32% to nearly R40bn.
Quinn said, “I am extremely comfortable with the strong foundations that Nedbank has built, including strong capital and liquidity levels, a strong and vibrant culture, a focus on transformation (diversity, equity and inclusion), leading ESG credentials and significant investments in technology, all culminating in exciting prospects for the group.”
Looking ahead, Nedbank projects South Africa’s GDP to reach 1.4% in 2025, with inflation within the SA Reserve Bank’s 3%-6% range and the prime lending rate dropping 50 basis points to 10.75%. Corporate lending is expected to rise, while household lending may lag until mid-2025. Risks persist from global geopolitics, trade tensions, and domestic woes like unreliable electricity and rail networks.
BUSINESS REPORT