Nedbank Group used acquisitions and portfolio restructuring to redefine its growth strategy in 2025, pursuing expansion into fintech and East Africa while reorganising its operations to strengthen long-term competitiveness.

In its 2025 Integrated Report, the banking group said the financial year was characterised by decisive corporate actions, including the acquisition of South African fintech company iKhokha, the disposal of its stake in Ecobank Transnational Incorporated, and a proposed deal to acquire a controlling interest in Kenya’s NCBA Group.

The bank said these moves formed part of “a series of bold and swift strategic decisions to reshape our business, enhance our competitive position, and lay a strong foundation for future value creation.”

The purchase of iKhokha marked one of the group’s most significant transactions during the year, strengthening Nedbank’s digital payments capabilities and deepening its presence in the small and medium-sized enterprise (SME) sector.

Management noted that the acquisition “significantly strengthen[s] our capabilities and market position in the crucial small and medium-sized enterprise sector,” positioning the bank to benefit from growing digital commerce across Africa.

At the same time, Nedbank exited its shareholding in ETI, describing the decision as part of a broader repositioning of its African footprint. The proposed acquisition of NCBA Group represents a renewed expansion push into East Africa, targeting markets where the bank can exercise stronger operational control.

The group said the transactions represent “a strategic reset of our African presence, focusing on markets where we can operate with control and drive meaningful growth.”

Alongside acquisitions, Nedbank undertook a major organisational restructuring, consolidating its retail and business banking operations into two focused divisions — Personal and Private Banking (PPB) and Business and Commercial Banking (BCB).

“We successfully reorganised our retail and business banking operations into two focused clusters… to enhance client-centricity and drive efficiency,” the bank said.

The restructuring aimed to simplify operations, improve service delivery and support growth initiatives driven by digital banking and SME financing.

Despite a challenging macroeconomic environment, Nedbank delivered modest financial growth during what it described as an investment year.

Headline earnings rose 2% to R17.2 billion, while diluted headline earnings per share increased 3% to 3,628 cents, supported by a share buyback programme.

Return on equity stood at 15.4%, exceeding the group’s cost of equity of 14.6%. The cost-to-income ratio increased to 57.8%, influenced by slower revenue growth and a once-off R600 million settlement with Transnet.

The group declared a full-year dividend of 2,132 cents per share, up 3%, while maintaining a strong Common Equity Tier 1 capital ratio of 12.9%.

Nedbank’s transformation strategy also translated into operational gains. The bank’s client base expanded by 7% to eight million customers, while active Money App users grew 14% to three million.

Digital product sales accounted for 73% of all sales in the Personal and Private Banking cluster, reflecting accelerating adoption of online banking channels.

The group said its forward strategy is anchored on three core value drivers — growth, productivity improvements and disciplined risk and capital management.

Key initiatives included modernising payments infrastructure, expanding insurance cross-selling opportunities and diversifying revenue streams.

“We expect to see the benefits of our strategic reorganisation, recent acquisitions, and productivity initiatives accelerate in the coming years,” the report noted.

Nedbank targets a medium-term return on equity of 17% and a cost-to-income ratio of 54%, with long-term ambitions of achieving an ROE above 18%.

The bank maintained governance aligned with the King IV corporate governance framework and adopted IFRS Sustainability Disclosure Standards S1 and S2 for the first time.

Top risks identified for 2026 include business execution risk, information technology risk, cyberrisk, model risk and credit risk.