Nedbank reports R8.4bn profit
Nedbank Group's results for the six months to 30 June 2026 show year-on-year (yoy) headline earnings (HE) of R8.4 billion, exceeding the bank's expectations at the start of the year. HE was supported by stronger net interest income and non-interest revenue growth, together with disciplined expense management, although this was partly offset by a higher impairment charge and the absence of further associate income from Ecobank Transnational Incorporated (ETI) following the disposal of Nedbank's investment. Excluding the ETI base effect, diluted headline earnings per share (DHEPS) increased by a strong 15%, reflecting solid underlying operational performance.
Return on equity (ROE) was 15.0% for the group (H1 2025: 15.2%), and was also ahead of expectations. Balance sheet metrics remained strong, supporting the declaration of an interim dividend of 1,052 cents per share.
"In 2025, we took bold steps to become more client-centred, unlock growth and diversify earnings," said Nedbank chief executive Jason Quinn. "This included implementing and finalising the strategic organisational restructure, progressing the integration of Eqstra, concluding the acquisition of iKhokha, concluding the sale of Nedbank's 21% shareholding in ETI, and announcing our intended acquisition of approximately 66% of NCBA to support growth in East Africa. These strategic shifts are starting to yield benefits, evident in the growth across our businesses."
"South Africa's operating environment remained mixed in the first half of 2026, with stronger-than-expected GDP growth in the first quarter contrasted with rising inflation, higher interest rates and continued affordability pressure on households," Quinn added.
"However, we are encouraged by an improving economic outlook, supported by a more credible fiscal path, structural reforms and recent credit rating upgrades, while South Africa's investment appeal remains intact despite global uncertainty."
Bold decisions yielding benefits
Corporate and Investment Banking (CIB) advances growth increased to 8% year on year, reflecting sustained momentum in deal execution and pipeline conversion. In Business and Commercial Banking (BCB), new business momentum and early revenue benefits have started to emerge. Advances growth of 6% accelerated from a 2% decline a year earlier, supported by strong double-digit growth in new loan payouts in both the mid-corporate and commercial segments.
Growth and efficiency improvements in Personal and Private Banking (PPB) also continued. Advances growth of 6% maintained momentum from the previous year as new loan payouts in home loans and card lending increased by double digits, resulting in market share gains, while MFC retained its market-leading position as payouts rose by 9%. Innovation initiatives, including Quick Loans with Jumo and a new revolving credit facility, contributed 8% of unsecured lending production. PPB clients increased by 4% to 7.6 million, while main-banked clients rose by 2% to 3.9 million.
In Nedbank Africa Regions (NAR): SADC, strategic execution supported revenue growth and operational efficiency. Advances grew by 21%, while non-interest revenue increased by 12%, driven by strong client activity and higher commission and fee income.
"We are pleased to have reached the target of a 66% shareholding in NCBA after shareholders representing 79.9% of NCBA's issued shares accepted our offer, marking an important milestone in the proposed acquisition," Quinn said.
Digital growth and AI adoption
"Our clients continue to embrace the benefits and convenience of digital channels, evident in higher digital transaction volumes and values," Quinn said.
Digitally active retail clients increased by 8% to 3.5 million in PPB, while in the NAR: SADC business the proportion rose from 69% to 72% of the total active client base. Active Nedbank Money app users increased by 13% to 3.2 million, supporting a 16% increase in transaction values. In NAR: SADC, app usage increased by 17%, with the app remaining the preferred digital channel.
Adoption of the Nedbank Business Hub (NBH) by juristic clients continued to rise as self-service functionality improved and new digital features were introduced. In BCB, about 77% of clients actively use NBH, while CIB client adoption increased to 56%.
Nedbank's Intelligent Hyper Automation (NIHA) strategy, which combines artificial intelligence (AI), generative AI, analytics, machine learning and robotic process automation, is delivering measurable benefits across revenue generation, credit effectiveness, client experience, productivity, cost optimisation and fraud prevention. To date, the strategy has unlocked more than R375 million in annualised benefits.
Looking ahead
South African GDP growth is expected to improve modestly to around 1.3% in 2026 and 1.4% in 2027, supported by resilient consumer spending but constrained by weak business confidence, subdued fixed investment and global energy price risks. Inflation is expected to average around 4.0% in 2026, remaining above the South African Reserve Bank's 3% target but within its tolerance band. The prime lending rate is expected to increase by a further 25 basis points in September 2026 before declining in 2027.
Banking conditions are expected to improve gradually, with credit growth projected to remain positive and end the year at around 7%, although downside risks remain.
"We expect the underlying growth momentum across all our businesses to continue in the second half of 2026, supporting an improvement in headline earnings growth," Quinn said.
"I am pleased that Nedbank's leadership in sustainability, transformation, client value and AI was recognised through multiple awards and rankings during the first half of 2026.
"These achievements reinforce our position as a leading African financial services provider and reflect the dedication of our people, the trust of the communities we serve, and the continued support of our clients, regulators and stakeholders as we deliver value."
Quinn also acknowledged chief operating officer Mfundo Nkuhlu, who will retire at the end of the year after 22 years with the group.
"On behalf of the Board, the Group Executive Committee and all our colleagues, I extend our heartfelt thanks to Mfundo for his exceptional service, wise counsel and unwavering dedication to Nedbank," he said.
