Nedbank sets milestone in 2025 with Avo Auto surpassing R1bn and HEPS up 3%

Nedbank has announced its unaudited provisional results for the fiscal year ended December 31, 2025, demonstrating solid performance supported by its expanding digital ecosystem strategy. The South African bank has shown significant growth across multiple business areas, reaffirming its position as an innovative financial institution in the region.

Avo Greenbacks Platform Drives Digital Ecosystem with 35% Growth

The Avo platform experienced extraordinary growth in 2025, with over 700,000 active Nedbank Greenbacks members generating a 35% increase in gross merchandise value (GMV). This performance was fueled by key improvements implemented in 2025, including the integration of new exchange features, the introduction of EFT Instant, and a redesigned travel experience that significantly increased user appeal.

Since its launch in 2020, Avo SuperShop has reached a notable milestone with over 24,000 businesses registered, selling products and services through the platform and creating a robust digital commerce ecosystem. In the automotive segment, Avo Auto delivered exceptional performance, recording over R1 billion in accumulated vehicle sales volume, marking an important milestone in the bank’s service diversification.

Key Earnings Grow 2% While ROI Remains Steady at 15.4%

On the financial front, Nedbank Group’s metrics reflect operational strength. Diluted earnings per share (HEPS), a key profitability indicator in the South African financial sector, increased by 3% in 2025. The group’s core earnings rose 2% to R17.2 billion, while return on investment (ROI) stood at 15.4% (compared to 15.8% in 2024), consistently above the group’s established cost of capital (COE) for the period.

The bank attributed this progress to a significant improvement in credit loss management. However, this gain was achieved amid moderate growth in total income, influenced by the sale of its 21% stake in Ecobank Transnational Incorporated (ETI) during the second half of the year, which impacted associate income. Additionally, expense levels were pressured by a unique agreement with Transnet. Despite these headwinds, the bank declared a final dividend of 1,104 cents per share, reflecting confidence in the strength of its balance sheet.

Strategic Restructuring and Acquisition of iKhokha Set New Course

Jason Quinn, CEO of Nedbank Group, commented on the transformation experienced during 2025: “2025 was a pivotal year in which we executed bold strategic transformations and made swift decisions.” Quinn detailed the internal restructuring that reorganized the Retail and Business Banking (RBB) and Nedbank Wealth clusters into a more focused, customer-oriented organizational architecture, creating the new Personal and Private Banking (PPB) and Business and Corporate Banking (BCB) clusters starting July 1, 2025. These changes were well received by stakeholders, with leadership positions successfully filled and growth dynamics evident in underlying metrics.

Alongside this, Nedbank completed the full acquisition of fintech iKhokha, a strategic move aimed at strengthening its offerings to small and medium-sized enterprises (SMEs) through digital innovation and inclusive financial services. These initiatives solidified the bank’s position as a digital transformation agent in South Africa.

Continental Expansion and Outlook for 2026

The divestment of its stake in ETI in December 2025 marked a reset of Nedbank’s continental strategy, refocusing on the SADC and East Africa regions. In line with this vision, the bank announced in the first quarter of 2026 its intention to acquire a controlling stake in NCBA Group plc, a leading financial institution in East Africa, for an estimated R13.9 billion, highlighting the group’s expansion ambitions.

Regarding projections for 2026, Quinn stated: “We expect the solid underlying momentum across all our business segments to be partly offset by the normalization of wholesale impairments from a low base in 2025, margin pressures from declining interest rates, and associate income from ETI that will not be replicated.” The CEO projected that ROI for 2026 will likely be above 15%, converging toward 2025 levels and surpassing the revised higher cost of capital of 14.0%. Nedbank anticipates building ROI to approximately 17% in the medium term, supported by stronger income, thus reinforcing its value creation trajectory in 2025 and beyond.