Nedbank combines a resilient 15.0% ROE franchise and 7.2%–7.5% dividend yield with NCBA-led growth, offering substantial upside if execution lifts ROE toward 17% by 2028.
Overview
Nedbank is a diversified South African banking and wealth-management group with approximately **R1.6 trillion of assets, R501 billion of AUM and more than 8.0 million clients**. It earns revenue through net interest income from lending and deposits and non-interest revenue from transactions, cards, payments, insurance, wealth management and trading. South Africa remains the core profit market, but the franchise is extending its runway through the 66% NCBA acquisition in East Africa and the R1.65 billion iKhokha purchase in SME merchant acquiring. H1 2026 showed resilient underlying execution: revenue rose 6.3% to R38,235 million, NIR grew 10%, cost-to-income improved to 56.2%, ROE was 15.0% and CET1 was 12.6%. Reported headline earnings were broadly flat at R8,405 million because H1 2025 included R986 million of ETI associate earnings, but earnings grew 12% excluding ETI. At R291.00, valuation is undemanding at approximately 8.0x–8.6x trailing P/E, 1.14x P/B and a 7.2%–7.5% dividend yield. Near-term catalysts are NCBA consolidation, potential 2027 monetary easing, iKhokha growth and progress toward approximately 17% ROE by 2028. Sell-side targets rose to R319.31–R327.18 after results.