Nedbank Group (NEDJ.J): Core banking strength vs. peer growth differentials: A Neutral view

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Nedbank Group (NEDJ.J): Core banking strength vs. peer growth differentials: A Neutral view

Goldman Sachs Nedbank Group (NEDJ.J)

leveraging a decade of IT investment, scaling the retail business to optimize the CIR, and

capitalizing on its market-leading CIB expertise. While IT remains a strategic priority in a

digital-first landscape, we expect efficiency programs to target staff costs and the

optimization of office and branch footprints. Supported by a moderating inflationary

environment, we project a 5% opex CAGR through 2028 (down from 6% over the prior

five years). Combined with a projected 7% revenue CAGR, this creates significant

potential for operating leverage. Consequently, we expect the CIR to improve to c.55%

by 2028E (relative to the 54% target) and the cost-to-asset ratio to decline marginally to

2.7%. This trajectory should drive a 10% PPOP CAGR (peers: +11%), with the

PPP-to-RWA ratio remaining resilient above 4% through 2028.

Asset quality: Sustained recovery from 2023 on improving macro, and management

actions in loan origination and collections. We see stabilization in CLR to 77bps

through to 2028, slightly better than the mid-point of the target range

Nedbank’s asset quality has demonstrated a sustained recovery since 2023, when the

CLR peaked at c.112bp due to severe macroeconomic pressures on the PPB segment —

specifically high inflation, load-shedding, and steep prime rate hikes. Driven by a

moderating macro environment and disciplined management actions in loan origination

and collections, the CLR improved to 68bps by 2025, falling below the mid-point of the

60-100bps TTC target range. Looking ahead, we anticipate the CLR will stabilize at

77bps through 2028. While we expect a slight uptick in 2026 as the extraordinary