Nedbank Group Ltd: Encouraging progress but more needed

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Nedbank Group Ltd: Encouraging progress but more needed

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Nedbank Group Ltd

Encouraging progress but more needed

Reiterate Rating: NEUTRAL | PO: 307.00 ZAR | Price: 275.05 ZAR

Reiterate Neutral; delivery must broaden 25 June 2026

Nedbank’s 1H26 pre-close trading update showed progress, as NII growth potential Equity

improved (albeit with 1H26 still weak) and cost containment was ahead of expectations.

While CoR is probably the key swing factor (likely macro driven) for earnings in 2H26E,

Key Changesthe Group still needs to broaden its EPS growth potential to move beyond Neutral. We

reduce our 2026E EPS by 2.2% as lower NIR growth and higher provision expenses (ZAR) Previous Current

offset NII and operating expense gains. Our 2026E EPS growth excluding NCBA is 1ppt Price Obj. 300.00 307.00

below consensus. However, higher NII and lower operating expenses raise our 2027-28E 2026E EPS 38.84 37.99

EPS by 1-2%. Higher EPS growth raises our valuation ROE and lifts our PO to ZAR307 2027E EPS 41.94 42.35

(from ZAR300). We reiterate our Neutral rating on Nedbank. 2028E EPS 45.53 46.44

2026E DPS 22.85 22.35

Growth is improving where it matters

Management noted that lending growth, hedging and higher interest rates support a Harry Botha >>

Research Analyst

slightly higher NII growth outlook in 2026E, above mid-single digits (BofAe 6.2% Merrill Lynch (South Africa)

excluding NCBA; consensus +6.3%) vs low-to-mid single digit growth in 1H26E. Though +27 113 055 152 harry.botha@bofa.com

our 2027-28E loan growth expectations are unchanged, we see 1% higher NII due to

higher NIM from hedging benefits. We also reduce our 2027-28E operating expenses by

3%. While lower NIR partially offset the benefits, the changes increase our 2027-28E

EPS by 1-2%. Stock Data