Nedbank says 2026 ROE likely to be above 15%

Nedbank says 2026 ROE likely to be above 15%

Nedbank’s Return on Equity Outlook for 2026: A Cautious Path to Growth

Nedbank Group has outlined a strategic focus on improving its return on equity (ROE) amid evolving economic conditions. As of the first half of 2025, the bank reported an ROE of approximately 15%, aligning with its current operational environment. Management has emphasized a medium-term target of lifting ROE to 17% and exceeding 18% over the long term through disciplined capital allocation and growth initiatives.

Analyst forecasts suggest Nedbank's ROE may reach 15.2% by 2026, reflecting a modest but achievable trajectory. This projection accounts for the bank's recent strategic adjustments, including the divestment of a 21.2% stake in Ecobank Transnational Incorporated for ZAR 1.7 billion, which aims to optimize capital efficiency. Additionally, Nedbank's investments in digitization, artificial intelligence, and renewable energy financing are expected to drive operational efficiencies and diversify revenue streams.

However, external challenges remain. The bank has cited risks such as the U.S. imposing 30% tariffs on South African exports and global economic slowdowns, which could temper growth prospects. Nedbank's interim results for the six months ending June 2025 showed a 7% decline in profit attributable to ordinary shareholders, underscoring the impact of a subdued economic climate.

While Nedbank's ROE is projected to exceed 15% in 2026, the path to its longer-term targets will depend on macroeconomic stability, effective execution of strategic initiatives, and the success of cost-containment measures. Investors are advised to monitor the bank's full-year 2025 results, scheduled for March 2026, for further clarity on progress toward these goals.

This article is for informational purposes only and does not constitute financial advice.