Moody’s, a global rating agency, has described Nedbank Group Limited’s planned divestment of its 21.2% stake in Ecobank Transnational Incorporated (ETI) as credit positive, saying the move will allow the South African lender to sharpen its focus on more profitable markets.
The disposal, valued at ZAR1.8 billion ($100 million), will enable Nedbank to improve profitability by concentrating its continental strategy — outside South Africa — on growth regions such as East Africa and the Southern African Development Community, the ratings agency said in a statement.
Moody’s also highlighted Nedbank’s separate agreement to acquire 100% of iKhokha Proprietary Limited, a South African fintech that provides card machines and digital payment tools to SMEs, for ZAR1.65 billion ($90.5 million) in cash.
The agency described the deal as “secured,” adding that it expects a negligible short-term effect on liquidity given the relatively small purchase price.
Since taking office more than a year ago, CEO Jason Quinn has overseen a review of Nedbank’s African portfolio, including its long-standing investment in ETI. He acknowledged that Nigeria’s volatile operating environment — particularly the persistent depreciation of the naira, ETI’s primary currency — eroded value and limited synergies, making divestment inevitable.
“This change represents a reset of our strategy on the rest of the continent, with a clear focus on the Southern African Development Community and East African regions in businesses we own and control,” Quinn said.
Nedbank continues to derive the bulk of its earnings from its home market. Its 2024 annual report shows South Africa accounted for 90% of the group’s R1.4 trillion ($76.4 billion) in assets and 79% of its R16.9 billion ($922 million) in headline earnings.
Moody’s added that the Ecobank sale will also “support capital allocation optimisation by reallocating the sale proceeds to other growth opportunities.”
As of June, Nedbank’s ETI stake carried a value of ZAR1.8 billion ($98.7 million) — far below the ZAR6.3 billion ($500 million) originally invested.
The holding has been weighed down over the years by ZAR8.3 billion ($455 million) in foreign-currency translation losses, ZAR1.8 billion ($98.7 million) in impairments, and ZAR1.4 billion ($76.8 million) in other comprehensive income charges, despite contributing ZAR6.8 billion ($373 million) in associate income.
Note: Figures were originally reported in South African rand and converted using the average official exchange rates of $1/R18.24 for the first six months of 2025 and $1/R18.33 for 2024.
