Nedbank Group Limited reported largely unchanged headline earnings of R8.4 billion ($509 million) for the six months ended 30 June 2026, as income growth and cost discipline offset higher impairment charges.
The South African banking group released its unaudited interim financial results on 4 August 2026, noting that the performance exceeded its expectations at the beginning of the year despite a challenging economic environment marked by geopolitical tensions and inflationary pressures.
Headline earnings increased marginally from R8.3 billion recorded in the first half of 2025. Excluding the impact of the disposal of Nedbank’s investment in Ecobank Transnational Incorporated (ETI) in 2025, underlying headline earnings growth stood at 12%.
Nedbank Group Chief Executive Officer Jason Quinn said earnings were supported by improving net interest income growth, strong non-interest revenue growth and disciplined expense management.
However, these gains were partly offset by higher impairment charges and the absence of associate income from ETI following the sale.
Nedbank reported modest improvement in credit growth during the period, supported by stronger corporate lending activity. Corporate credit growth accelerated from a low base, while household credit growth improved slightly but remained constrained by affordability pressures.
The bank expects credit growth to remain positive and reach about 7% by the end of 2026, although risks remain tilted to the downside.
Nedbank’s gross loans portfolio recorded growth in renewable energy lending, increasing the group’s renewable exposure to R47 billion. The lender has continued expanding financing for green energy projects as part of its lending activities.
Nedbank Declares R10.52 Interim Dividend
Nedbank declared an interim dividend of R10.52 per share, equivalent to 1,052 cents per share, paid from income reserves.
The dividend was supported by the group’s balance sheet position, with Nedbank reporting a return on equity (ROE) of 15.0% during the period, compared with 15.2% in the first half of 2025. The reported ROE remained above the group’s cost of equity, which stood at 14.0%.
Nedbank Advances NCBA Group Acquisition
Alongside its interim results, Nedbank provided an update on its planned acquisition of a stake in NCBA Group, marking a major expansion step in East Africa. Shareholders representing 79.9% of NCBA’s ordinary shares accepted Nedbank’s offer, exceeding the bank’s minimum acceptance threshold of 66%. The transaction settlement will comprise approximately 80% Nedbank shares and 20% cash.
Under the agreement, Nedbank will issue about 443.6 million new shares, while the cash portion will amount to approximately R3.0 billion ($95 million) or KSh31.6 billion. The transaction has received key regulatory approvals, including clearances from Kenya’s Capital Markets Authority and regional competition authorities.
Financial completion is expected in late Q3 or early Q4 2026. Following completion, NCBA Group will retain its local leadership structure, independent governance arrangements and listing on the Nairobi Securities Exchange (NSE).
South Africa Economic Outlook Revised Lower
Nedbank lowered its South African GDP growth forecast for 2026 to 1.3%, down from the previous estimate of 1.5% issued in February. The revision followed increased global uncertainty linked to Middle East geopolitical tensions, including the US-Iran conflict and disruptions around the Strait of Hormuz, which contributed to higher energy costs and inflationary pressures.
Quinn said the operating environment in South Africa remained mixed, with first-quarter real GDP growth exceeding expectations, while higher fuel prices pushed consumer inflation to 5% in June.
The South African Reserve Bank (SARB) increased interest rates by 25 basis points in May, taking the prime lending rate to 10.5%. Despite these pressures, Quinn said South Africa’s economic outlook remained supported by improvements in fiscal management, structural reforms and recent credit rating upgrades.
“Many of the country’s positive prospects as an attractive investment destination remain intact despite global uncertainties and the conflict in the Middle East,” Quinn said.
Nedbank reported modest improvement in credit growth during the period, supported by stronger corporate lending activity. Corporate credit growth accelerated from a low base, while household credit growth improved slightly but remained constrained by affordability pressures.
The bank expects credit growth to remain positive and reach about 7% by the end of 2026, although risks remain tilted to the downside.
Nedbank’s gross loans portfolio recorded growth in renewable energy lending, increasing the group’s renewable exposure to R47 billion. The lender has continued expanding financing for green energy projects as part of its lending activities.
Nedbank Expects Earnings Growth Recovery in Second Half
Quinn said the group expects underlying growth momentum across its businesses to support an improvement in headline earnings growth during the second half of 2026.
“We expect the underlying growth momentum across all our businesses to support an improvement in HE growth from the flat outcome reported in the first half,” he said.
Nedbank expects return on equity to exceed 15% in 2026, approaching 2025 levels. Over the medium term, the group expects ROE to reach approximately 17% by 2028, supported by revenue growth and efficiency improvements.
South Africa’s GDP growth is forecast to improve slightly to around 1.3% in 2026 and 1.4% in 2027, driven by resilient consumer spending. However, growth is expected to remain constrained by weak business confidence, limited fixed investment and global energy price risks.
Inflation is expected to average 4.0% in 2026, remaining above the SARB’s 3% target. Nedbank expects the central bank to increase lending rates by another 25 basis points in September 2026 before rates gradually decline in 2027.
Leadership Changes at Nedbank
Nedbank also announced changes to its executive leadership team. Long-serving executive Mfundo Nkuhlu will retire from the group’s leadership team. Nikos Angelopoulos, former Group Chief Information Officer at MTN Group Limited, will join Nedbank as Group Chief Information Officer effective 1 September 2026.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.