Nedbank Group, a leading financial institution in South Africa, delivered resilient financial growth in 2024, with headline earnings rising 8% to R16.9 billion ($909 million), driven by higher non-interest revenue, disciplined cost controls, and improved asset quality.
In a press release on Tuesday, the bank disclosed total revenue increased 4% to R72.2 billion ($3.8 billion), while diluted headline earnings per share (DHEPS) climbed 11%, benefiting from a 2023 share buyback program.
It declared a final dividend of 1,104 cents per share, up 8%, reflecting confidence in its capital position and a 57% payout ratio.
Resilient profitability despite macro headwinds
Nedbank’s strong performance is against the backdrop of a sluggish economic environment, with South Africa’s GDP growth expected to slow to 0.5% in 2024, down from 0.7% in 2023.
The first half of the year was particularly challenging due to elevated interest rates, geopolitical risks, and political uncertainty ahead of national elections.
However, the formation of a government of national unity in mid-2024 provided a stabilizing effect on financial markets, lifting business confidence, strengthening the rand, and lowering bond yields.
By year-end, inflation had moderated, the SARB cut rates by 50 basis points, and investor sentiment improved, the bank st
Stronger balance sheet, improving returns
Despite margin pressure and slower loan growth, Nedbank expanded return on equity (ROE) to 15.8%, up from 15.1% in 2023, reflecting disciplined capital allocation and efficiency gains.
The bank’s credit loss ratio improved significantly, falling to 87 basis points from 109bps, signaling a healthier loan book and reduced impairment costs.
2025 outlook: cautious optimism
Looking ahead, Nedbank expects a moderate economic rebound, bolstered by lower inflation and a potentially more accommodative monetary policy stance.
However, the bank remains vigilant about geopolitical risks and global trade disruptions.
Nedbank aims to push ROE beyond 16% in 2025, with medium-term targets above 17% and a long-term ambition exceeding 18%, underscoring its commitment to delivering stronger shareholder returns.
