Nedbank Group on Wednesday reported headline earnings of R8,405 million for the six months to June 2026, up just 0.1% on the same period a year earlier, as revenue growth and disciplined cost management offset a softer contribution from the lender's stake in Ecobank Transnational Incorporated. The Johannesburg-listed bank said revenue rose 6% year on year to R38,235 million, while the credit loss ratio came in at 95 basis points, keeping the impairment charge within the group's through-the-cycle target range.

Return on equity was steady at 15%, in line with the group's medium-term target range. The result places Nedbank at the mid-point of the South African big-four peer group for the interim reporting season and reflects a franchise still recovering from a subdued domestic macroeconomic backdrop, with cross-border operations providing a modest but variable contribution to earnings.

REVENUE GROWTH DRIVES OPERATIONAL PROGRESS

Nedbank said diluted headline earnings per share rose 2% during the half, or 15% when the ETI contribution was excluded, underlining the strength of the underlying South African franchise. Management pointed to broad-based transactional income and improved margins as the principal drivers of the top-line performance, with retail and business banking, corporate and investment banking, and wealth all contributing to the revenue expansion.

The 6% revenue expansion, combined with a stable credit loss ratio at 95 basis points, allowed the group to absorb cost pressures without derailing its return metrics. The credit charge sat within the group's through-the-cycle guidance range, and Nedbank said asset quality trends were consistent with a gradually improving South African macroeconomic backdrop. Wholesale portfolios remained resilient while retail unsecured lending continued to normalise from post-pandemic peaks.

The bank's 15% return on equity was unchanged from the comparative period, keeping Nedbank inside the peer group of large South African lenders reporting mid-teens ROEs for the interim season and demonstrating the resilience of the franchise through a challenging period.

GUIDANCE RAISED ON NET INTEREST INCOME

In its outlook commentary, Nedbank raised its full-year guidance for net interest income growth, citing better-than-expected momentum in lending margins and continued growth in transactional deposits. The upgrade marks one of the first material guidance revisions from a big-four South African bank in the current reporting cycle and signals management confidence in the trajectory of the franchise's core earnings engine for the remainder of 2026.

The group did not alter its medium-term target of a return on equity above the cost of equity plus a defined premium, but said the stronger NII trajectory should support progress towards that goal in the second half. Management reiterated its focus on digitisation of the retail platform, disciplined risk-weighted asset growth in corporate and investment banking, and continued optimisation of the balance sheet through active capital management.

The interim results come as Nedbank pursues its cross-border ambitions through a partial offer for up to 66% of Kenya's NCBA Group, which the group announced earlier in 2026. Investors will look to the second-half print for evidence that the raised NII guidance and steady ROE can translate into stronger bottom-line growth as the ETI drag normalises and revenue momentum feeds through to earnings.