One of South Africa’s biggest banks going strong

Nedbank delivered a solid performance in its 2024 financial year, as the bank benefitted from higher commission and fees, lower impairments and strategic market share gains in key segments.

Nedbank released its results for the year through December 2024 on Tuesday, 4 March 2025, which revealed a solid performance from one of South Africa’s so-called ‘Big Four’ banks.

The bank reported that its net interest income remained relatively flat, growing by around 0.8%. Its non-interest income grew significantly, up 9.75% from 2023.

This is largely due to the bank’s higher commission and fees during the period, which it said benefited from deal closures in Corporate and Investment Banking (CIB).

Nedbank’s net commission and fees income grew by 10.42% in the 2024 financial year.

The bank’s income also benefitted from higher trading income, up 7.47%, and growth in insurance income, up 8.71%.

Nedbank’s profit for the period grew by 9% to R18.47 billion, while basic earnings per share grew by 11.45% to 3,610 cents per share.

The bank’s return on equity (ROE) strengthened to 15.8%, from 15.1% in the prior period, reflecting steady progress towards its ROE targets.

The company’s results were also supported by lower impairments in 2024. Its credit loss ratio declined to 87 basis points compared to 109 basis points in 2023.

This is mainly attributable to improved collections and lower impairments in its Retail and Business Banking segment.

In addition, a R10 billion reduction in stage 3 loans in the bank’s CIB business lowered impairments.

Nedbank said the operating environment in 2024 remained challenging, with economic activity relatively weak.

The first 6 months were particularly difficult, given geopolitical uncertainty, high interest rates and general uncertainty ahead of South Africa’s national election.

“A peaceful and fair election outcome and the swift formation of a government of national unity brought cautious optimism in financial markets resulting in lower bond yields, stronger equity markets and a stronger rand, while credit default swap spreads also improved,” the bank said.

Nedbank explained that, from a strategy perspective, a key highlight of 2024 was the fundamental completion of its Managed Evolution IT transformation, which it says has delivered a refreshed modern technology platform.

“This platform, along with our enhanced digital capabilities, supported ongoing strong digital growth, market-leading client satisfaction metrics, solid main-banked client gains, and higher levels of cross-sell,” the bank explained.

“Under strategic portfolio tilt, we recorded market share gains in key areas such as home loans, vehicle finance, wholesale term-lending and retail deposits.”

In addition, the bank highlighted its Target Operating Model 2.0 programme, which has now ended, that delivered cumulative cost benefits of R3 billion through headcount reduction, real estate floor space savings and back-office optimisation.

“Under our new Transform agenda, which emerged as part of our strategy refresh in 2024, our focus is expanding to new areas of growth,” the bank explained.

This includes extracting commercial value from its technology investments, with an emphasis on leveraging data and AI, optimising end-to-end processes and payment modernisation, and cross-selling insurance products to the Nedbank client base.

The company also plans to diversify its portfolio into East Africa by leveraging its strengths and capabilities in CIB.

The bank further revealed plans to launch a dedicated new offering to transform how mid-sized corporates access financial solutions through its commercial banking business, as well as building out its corporate transactional franchise.

Looking forward, Nedbank said it is cautiously optimistic about 2025’s prospects and expects an improvement in South Africa’s economic environment.

However, it highlighted global risks like geopolitical uncertainty, trade wars, and potential US foreign policy shifts as key threats to this positive outlook.

Nedbank declared a final dividend of 1,104 cents per share, up by 8% from the previous year.