South Africa's Nedbank Profit Rises on Non-Interest Revenue Growth
TLDR
- Nedbank Group Ltd. reported an 8% rise in full-year headline earnings to R16.9 billion ($907.56 million) for the year ending December 31, 2024
- Non-interest revenue grew 10% to R30.4 billion ($481 million), driven by strong growth in fees, trading income, and insurance revenue
- The bank’s impairment charge declined 17% to R7.9 billion ($125 million), with its credit loss ratio improving to 87 basis points
Nedbank Group Ltd. reported an 8% rise in full-year headline earnings to R16.9 billion ($907.56 million) for the year ending December 31, 2024, supported by higher non-interest revenue (NIR), lower impairment charges, and cost controls, the bank announced on Tuesday.
Non-interest revenue grew 10% to R30.4 billion ($481 million), driven by strong growth in fees, trading income, and insurance revenue. Net interest income (NII) edged 1% higher to R41.8 billion ($662 million) despite slower loan growth and margin pressure. The bank’s impairment charge declined 17% to R7.9 billion ($125 million), with its credit loss ratio improving to 87 basis points, reflecting better macroeconomic conditions.
Return on equity (ROE) rose to 15.8%, and the company declared a final dividend of 1,104 cents per share, an 8% increase from last year. Nedbank also announced a business reorganization, effective July 1, to expand its small and medium-sized enterprise (SME) banking segment. This move aligns with similar SME-focused initiatives by Capitec Bank and FirstRand Ltd.
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Key Takeaways
With South Africa’s GDP expected to grow 1.4% in 2025, Nedbank is positioning itself for long-term expansion. The bank continues investing in digital transformation, having completed its Managed Evolution IT overhaul, and aims to enhance client services through technology and process optimization. Nedbank’s focus on SMEs and sustainable development finance reflects a strategic shift toward growth sectors, as improved economic conditions present new opportunities. The financial sector remains competitive, but Nedbank’s diversification and digital strategy could support further earnings growth in 2025.
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