Nedbank Group · JSE:NED
Nedbank — FY2024 Earnings Presentation
63 slides from Nedbank's earnings presentation, March 2025
Slide 1: 2024 Annual Results
2024 Annual Results for the year ended 31 December 2024 NEDBANK GROUP LIMITED – 2024 Annual Financial Results 1
Slide 2: Agenda
Agenda Overview Operating environment Strategic review Financial overview Jason Quinn Outlook Chief Executive NEDBANK GROUP LIMITED – 2024 Annual Financial Results 2
Slide 3: 2024 overview
2024 overview ▪ Volatile & uncertain – sociopolitical issues & election outcomes ▪ Financial markets – reflect cautious optimism, although rising concerns around the potential impact of US foreign policy Operating environment ▪ Structural reforms – some green shoots in energy security, infrastructur
Slide 4: Operating environment – financial markets cautious optimism post GNU
Operating environment – financial markets continue to reflect cautious optimism post the formation of the GNU, but US foreign policy poses risk SA government bond yields (%) SA CDS spreads (bps) 300 14 250 12 200 Rand vs US$ 10 150 20 8 100 19 Jan 24 Jul 24 Jan 24 Jul 24 18 Cumulative SA foreign bon
Slide 5: Operating environment – difficult year, GDP growth 0,5%
Operating environment – 2024 was another difficult year, with SA GDP growth of only 0,5% expected. Some green shoots given progress on structural reforms SA GDP growth Progress on SA structural reforms1 (%) 8 H1 H2 Q1 Q2 Q3 Q4 Q1 23 23 24 24 24 24 25 6 Political uncertainty 4 Electricity shortage 2
Slide 6: Operating environment – SA infrastructure opportunity and credit growth
Operating environment – progress to unlock the large SA infrastructure opportunity has been slow, but business confidence & corporate credit growth are improving Nedbank Capital Investment Schedule1 Corporate credit growth (Rbn, constant 2024 prices) 15 700 10 R943bn SA government 600 5 infrastructu
Slide 7: Operating environment – consumer under pressure
Operating environment – the consumer is still under pressure & household credit growth muted, but the environment has become more conducive for a recovery SA prime interest rate SA inflation Real personal disposable income (monthly, %) (monthly, %) (Rbn) 15 10 3 500 12 8 3 000 9 6 6 4 2 500 3 2 0 0
Slide 8: Our strategy – perform and transform
Our strategy – focused execution (perform), while leveraging our strong foundations to grow (transform) Our purpose To use our financial expertise to do good for individuals, families, businesses & society Strategic value drivers Risk & Growth Productivity Capital Management Strategic value unlocks
Slide 9: Strategic value drivers – focused on execution across the board
Strategic value drivers – focused on execution across the board Risk & Capital Growth Productivity Management • Gross banking advances: • Good collection outcomes in Fortress balance sheet +7% (average: +4%) RBB & resolution of stage 3 loans in CIB • CET1 ratio: 13,3% • Retail main-banked clients: (
Slide 10: Strategic overview
Strategic Mfundo Nkuhlu overview Chief Operating Officer NEDBANK GROUP LIMITED – 2024 Annual Financial Results 10
Slide 11: Our strategy
Our strategy Our purpose To use our financial expertise to do good for individuals, families, businesses & society Strategic value drivers Risk & Growth Productivity Capital Management Strategic value unlocks Perform Digital Market-leading Focusing on areas Growth Creating + leadership client experi
Slide 12: Modern technology platform – Managed Evolution IT build completed
Modern technology platform – Managed Evolution IT build completed (fundamentally within scope, time & budget) Managed Evolution completion Core Modernised our transactional product, Total ME programme 95% lending & deposit systems spend banking 91% 85% R11,7bn 78% Modernised our payment engine (dome
Slide 13: Managed Evolution IT build programme – spend and benefits
Managed Evolution IT build programme – cash flow spend peaked in 2017 at R2,3bn & intangible software assets peaked in 2020 at R9bn, while benefits are being realised according to plan Additional info IT software development spend Intangible software assets on the Investment vs benefit realisation t
Slide 14: Digital leadership – benefits from ME technology investment
Digital leadership – ongoing benefits from our ME technology investment while unlocking new productivity & commercial opportunities Perform Transform Client onboarding Digital servicing Leverage artificial intelligence ▪ Intelligent Hyper Automation (NIHA) – harnessing Fully digital > 200 > 400 the
Slide 15: Digital leadership – digital activity and usage growing
Digital leadership – digital activity & usage continue to grow strongly, while increasingly differentiating Nedbank in the market Digital transaction volumes App transaction volumes Capability Additional info (# m) (# m) Servicing features offered (%) ▲12% ‘Nedbank ▲16% consistently above market on
Slide 16: Growth vectors – strategy refresh growth initiatives
Growth vectors – as part of our strategy refresh we identified various growth initiatives that will deliver incremental benefits in the medium-to-long-term Transform ▪ Grow & cross-sell our insurance products (both traditional bancassurance & GEP Insurance new solutions such as the MyCover suite) in
Slide 17: Strategic portfolio tilt – profitable market share gains
Strategic portfolio tilt – profitable market share gains in areas that create value BA900 market share Dec Dec Yoy (%) 23 24 change Perform Transform Total core loans 18,8 19,2 ▲ ▪ Scale retail lending market ▪ Leverage our strengths – share – home loans, Wholesale term loans 16,0 16,2 ▲ energy, inf
Slide 18: Strategic portfolio tilt – digital penetration and main-banked clients
Strategic portfolio tilt – leveraging digital penetration to build stronger franchises, grow main-banked clients & achieve higher levels of cross-sell Additional info Retail digitally active Retail Money app active Retail main-banked Retail cross-sell ratio clients (# million) users (# million) clie
Slide 19: Main-banked growth sustained across segments
Main-banked growth sustained across segments Main-banked clients1, # 000 Additional info Private Clients3 Kids & youth ▲2% ▲5% 95 104 114 127 134 456 421 436 452 460 Small Business ▲9% ▲4% Entry level Services3 1 365 1 309 1 412 1 609 1 755 177 180 185 192 199 ▲1% ▲ 1% Commercial Banking2,3 Middle 8
Slide 20: Target operating model – programme concluded
Target operating model – programme concluded at the end of 2024, with a focus on productivity, real estate optimisation & efficient back offices. Benefits from automation will continue Additional info Cumulative TOM benefits (Rbn) TOM 2.0 Optimising the shape of our infrastructure in a more digital
Slide 21: Productivity gains – Project Imagine branch design
Productivity gains – we continue to unlock productivity gains through Project Imagine branch design. Service employees now contribute 23% of sales (from 0%) Additional info 2023 Finalta survey1 Branch employee sales Branch floor space (yoy change) (Sales/role/day) (sqr metres) Imagine branch convers
Slide 22: Creating positive impacts – sustainable development finance
Creating positive impacts – ~R183bn sustainable development finance (SDF) Sustainable development finance exposures1 (Rbn) 19% 20% ~183 R33bn for green R29bn support R17bn certified buildings & for farmers & the sustainable finance 16% affordable home agriculture sector across multiple 14% 145 loans
Slide 23: Creating positive impacts – renewable energy leadership
Creating positive impacts – building on our leadership in renewable energy: exposures up by +32% to almost R40bn & significant new business wins Renewable energy financing ( drawn exposures, limits, Rbn) R30bn in awarded facilities1 ▲24% Strong activity in 2024 with 12 private power 57 generation de
Slide 24: Creating positive impacts – ESG highlights and ratings
Creating positive impacts – ESG highlights & ratings Independent ESG ratings of Nedbank 2030 finance Nature Position Inaugural Climate Top 9% emission targets set Statement Position AAA of global (thermal coal ▼47%, banks oil & gas ▼26% & published Change pic Statement (1st SA bank) published for ou
Slide 25: External recognition received in 2024
External recognition received in 2024 – across business excellence, technology & innovation and purpose & ESG Additional info 2024 The Banker 2024 Global Banking 2024 City of London 2024 Euromoney 2024 Global Magazine Awards 2024 Global Finance & Finance Review Wealth Banking & Finance Magazine Awar
Slide 26: Financial overview
Financial Mike Davis overview Chief Financial Officer NEDBANK GROUP LIMITED – 2024 Annual Financial Results 26
Slide 27: Key drivers – difficult operating environment offset by strategic delivery
Key drivers – the negative impacts of a difficult & volatile operating environment in 2024, offset by good strategic delivery Operating environment Strategic delivery H1 H2 H1 H2 2024 Global geopolitical SA household credit Technology/ environment ▲ ▲ growth ▼ ▼ Digital (DX) ▲ SA corporate Cross-sel
Slide 28: Improved financial performance and steady progress towards higher ROEs
Improved financial performance & steady progress towards higher ROEs, while maintaining a strong balance sheet ▲8% 15,8% ▲7% 13,3% 135% R16,9bn (23: 15,1%) R944bn (23: 13,5%) (Q4 23: 135%) Headline ROE Gross banking CET1 ratio LCR earnings advances ▲11% ▼87 bps ▲8% ▲10% 116% 3 538 cents (23: 109 bps
Slide 29: Shareholder value creation – continued improvement in ROE
Shareholder value creation – continued improvement in ROE, supporting a final 2024 dividend at the top of our payout ratio ROE & cost of equity (%) Dividend per share (cents) NAV per share (cents) 57% payout Cost of ratio ▲4% equity: 15% 1 104 1 022 866 No dividends 758 24 039 20 493 21 533 23 192 1
Slide 30: Headline earnings up by 8%
Headline earnings up by 8% – driven by strong NIR growth & lower impairments, offset by slow balance sheet & NII growth Headline earnings (Rm) ▲1% ▲10% ▼11% ▼17% ▲8% 153 1 608 3 015 195 ▲8% 2 703 336 15 650 16 934 HE NII NIR Associate Impairments Expenses Direct tax HE 2023 income & other 1 2024 1Ot
Slide 31: Banking advances – actual growth of 7%
Banking advances – actual banking advances grew at +7%, faster than average banking advances at +4% Gross banking advances (Rbn) ▲3% ▲13% ▲5% ▲9% ▲7% ▲4% ▼8% ▲1% ▲9% 29 29 27 26 17 17 944 206 209 208 200 200 885 882 914 179 185 164 Commercial Term Home Instalment Personal Credit Overdrafts Gross act
Slide 32: Banking advances – CIB actual growth of 10%
Banking advances – CIB’s actual banking advances growth of 10% exceeded average growth on the back of a strong Q4 2024 performance Additional info Corporate industry credit growth1 CIB gross actual & average banking (% yoy) advances (Rbn) 15 500 ▲10% Investment Banking 10 450 ▲3% ▪ Growth in key sec
Slide 33: Banking advances – RBB actual growth of 4%
Banking advances – RBB’s actual advances growth was modest at 4%, but still ahead of industry credit growth which continued to slow throughout 2024 Additional info HL applications2 Household industry credit growth1 RBB gross actual & average banking advances (Rbn) ▼ ▲ (% yoy) 10 550 15,3 12,8 12,3 1
Slide 34: Deposits up by 8%
Deposits up by 8% – driven by clients extending tenure in the current interest rate environment & Nedbank’s competitive offerings Deposits (Rbn) ▲9% ▲12% ►0% ▲38% ▲8% ▼11% 474 247 435 150 220 150 110 113 127 82 76 79 CASA Cash Call Fixed NCDs Other management & term deposits deposits * 2020 2021 202
Slide 35: NII up by 1% – NIM compression of 16 bps
NII up by 1% ‒ AIEBA growth of 5% offset by NIM compression of 16 bps Net interest margin (bps) Average SA prime (%) 12 (4) (6) (5) 11 10,75 (1) 10,50 (2) Mix - 10,25 10 (6) Pricing (3) DIS* (2) 9 +2 Stage 3** . 23 24 25 26 Feb '23 forecast Feb '24 forecast Feb '25 forecast NII sensitivity for 1% ch
Slide 36: NIR up by 10%
NIR up by 10% – solid growth across commission & fees, trading & insurance Non-interest revenue & income1 (Rm) ▲10% ▪ Commission & fees – driven by deal closures in CIB, as well as strong growth in maintenance fees, VAS & card in RBB ▪ Trading & fair value – supported by 13% growth in Markets due to
Slide 37: CIB NIR growth – a strong 2024 performance
CIB NIR growth – a strong 2024 performance Additional info Non-interest revenue (Rm) ▪ Commission & fees – higher arranging fees in growth sectors ▲7% ▲13% ▪ Trading income & FV gains up by 13% ▼ 12% ‒ Debt securities up 13% & equities up 5% despite challenging ▲>100% macroeconomic conditions across
Slide 38: Insurance – continued strong growth in MyCover suite
Insurance – continued strong growth in the MyCover suite & digitally active client base Additional info Gross earned premium (Rm) MyCover Funeral Gross earned premium Digitally active client ▲>50% base growth of >50% ▲24% Credit life cover ▲7% integrated in the digital ▲11% 2023 2024 Retail journeys
Slide 39: Asset Management – good growth in NIR
Asset Management – good growth in NIR, driven by increased AUM on the back of positive market movements Additional info Assets under management (Rbn) ASISA ▲6% rankings Launch of ▪ SA – 8th largest in 448 474 Global Strategic total AUM (7% 424 393 Bond Fund market share) 375 (US$110m in ▪ Internatio
Slide 40: Impairment charge down by 17% to R8,0bn
Impairment charge down by 17% to R8,0bn – driven primarily by a decline in RBB & CIB impairments Impairment charge (Rbn) ▪ RBB impairments down by 15% 13,1 – Consumer pressure still elevated, but the environment improved into H2 2024 ▼17% – Management interventions delivering benefits, 9,6 including
Slide 41: Group CLR down to 87 bps
Group CLR down to 87 bps – back within target range Credit loss ratios (bps) 24 23 22 21 20 TTC 250 GFC Covid CIB 14 24 22 42 82 15–45 CIB excl CPF 13 6 17 53 103 200 CPF 16 47 28 30 54 RBB 158 194 161 134 240 120–175 150 NCB 34 67 11 (21) 110 50–70 109 Retail 188 227 200 175 275 130–200 100 HL 66 8
Slide 42: Gross loans and advances and coverage
Gross loans & advances & coverage – large increase in stage 1 loans & significant reduction in stage 2 & 3 loans Gross loans & advances (Rbn) Coverage (%) 1 866 3,37 3,62 3,32 ▪ Stage 1 loans 818 48 34,3 34,2 40,5 807 ‒ Increase driven by book growth & loan migrations from stage 2 & 3 762 772 52 58
Slide 43: RBB impairments – improving macroeconomic environment
RBB impairments – an improving macroeconomic environment & decisive management actions over the past 2 years delivering benefits Additional info RBB stage 3 loans (hoh change, Rbn) Business & product level CLRs RBB CLR (%) (%) Key drivers CLR 226 ▪ Home loans – stage 3 inflows reducing, but remain e
Slide 44: Commercial property finance – high-quality, collateralised portfolio
Commercial property finance – a high-quality, well-diversified & highly collateralised portfolio Additional info Loan-to-value (%) Credit loss ratio (bps) 54 ▼ 47 High-quality, well-diversified ▼ & highly 30 28 50,5 53,4 52,0 52,6 51,1 collateralised 16 portfolio 20 21 22 23 24 20 21 22 23 24 54 52
Slide 45: Commercial Property Finance – sector trends
Commercial Property Finance – sector trends Additional info Office vacancies1 Sector trends Listed sector ▪ Office vacancies maintaining a downward ▪ Valuations continue stable upward ▪ Listed property sector was the trajectory: trend: best-performing asset class in 2024: total returns up 29%, relat
Slide 46: Expenses up by 8%
Expenses up by 8% – reflecting good expense management Expenses (Rm) ▲8% 2023 2024 ▪ Employee-related costs ‒ Salaries & wages: annual average salary increase (+6%), use of additional contractors to complete ME & additional costs to retain talent & scarce skills ‒ Variable-pay incentives aligned wit
Slide 47: Capital – CET1 ratio at 13,3%
Capital – CET1 ratio at 13,3%, well above target range, positioning us well to unlock growth opportunities CET1 ratio (%) Active capital management ▪ Maintain CET1 ratio above our 11-12% target range – considered appropriate in a (1,3) difficult & volatile environment 1,9 (0,2) (0,6) ▪ Retain capita
Slide 48: Cluster financial performance
Cluster financial performance Corporate & Investment Banking Retail & Business Banking R7,4bn 20,5% R6,4bn 17,1% ▲9% ▼5%▲11%▼39%▲5% ▲15% ▲2% ▲9% ▼15% ▲8% ROE ROE headline (2023: 18,9%) headline (2023: 16,0%) earnings earnings 14 bps 46,4% 158 bps 60,2% credit cost-to- credit cost-to- loss ratio inco
Slide 49: CIB financial performance – ROE improved to 20,5%
CIB financial performance – ROE improved to 20,5% on the back of a strong performance in NIR, coupled with disciplined capital management Additional info R7,4bn ▲ ▪ NII down by 5% ▲9% headline ‒ Actual advances up by 10% across various sectors earnings 20 21 22 23 24 ‒ Average advances up by 3%, wit
Slide 50: RBB financial performance – strong HE growth
RBB financial performance – strong HE growth, driven by an improved impairment performance Additional info R6,4bn ▲ ▲15% ▪ NII up by 2% headline ‒ Average advances growth slowing to +5% earnings 20 21 22 23 24 ‒ Impacted by lower client margins, lower funding spreads & 17,1% higher funding costs & t
Slide 51: RBB financial performance – Eqstra acquisition
RBB financial performance – Eqstra acquisition effective from 1 June 2024 Additional info Strategic purpose Salient features Eqstra enhances & complements Nedbank’s Income statement Dec 2024 fleet management business offerings GOI1 R764m ▪ Integrated world-class internet-based fleet Expenses R683m m
Slide 52: Wealth financial performance
Wealth financial performance – HE growth driven by NIR, with ROE remaining >10% above the group COE Additional info R1,3bn ▲ ▪ NII down by 1% ▲4% – Lower average deposits, following the exit of the corporate e- headline gaming sector, and lower average loans & advances, due to earnings 20 21 22 23 2
Slide 53: NAR financial performance
NAR financial performance – HE impacted by once-off base issues, but ROE maintained above COE Additional info R1,6bn ▼ ▪ SADC operations – HE of R582m, down 12% & ROE of 7,8% ▼14% headline ‒ Excluding base effect of Zimbabwe FX gains net of the NML, earnings HE up by 60% 20 21 22 23 24 ‒ NII up by 1
Slide 54: ETI associate investment – carrying value insignificant
ETI associate investment – carrying value now insignificant & well below ETI market value Additional info Associate income1 ETI carrying value vs market value (Rm) (Rbn) Return on ETI 22,0 investment2 18,2 11,0 12,4 5,6 ▼17% (%) 1,1 1,7 1 380 1 139 686 779 (178) 1,2 0,7 2,0 20 21 22 23 24 Carrying A
Slide 55: Outlook
Outlook Jason Quinn Chief Executive NEDBANK GROUP LIMITED – 2024 Annual Financial Results 55
Slide 56: Unlock transformational growth, while we continue to perform
Unlock transformational growth, while we continue to perform Perform – manage the group efficiently & improve profitability in the near term Transform – initiatives that will, over time, help us to get to our long-term ROE target of >18% Unlock value from Leverage our sector A more deliberate Scale
Slide 57: Strategic reorganisation – organisational design focused on client centricity
Strategic reorganisation – evolving into an organisational design more focused on client centricity Nedbank Group From 1 July 2025… BCB1 PPB1 CIB NAR (Business & Commercial Banking) (Personal & Private Banking) Asset Commercial Private & Private & Personal Mid-corp SME Management Banking Wealth Intl
Slide 58: Strategic reorganisation – rationale, benefits and key time lines
Strategic reorganisation – rationale, benefits & key time lines Rationale & benefits Key time lines PPB o Focus on individual clients o 4 March 2025 – announcement (Personal & o Grow & enhance insurance up- & cross-sell to the market Private o Q2 2025 – refine & implement Enhanced organisation & exe
Slide 59: Operating environment – cautious optimism and improving indicators
Operating environment – cautious optimism & an improvement in key economic indicators SA GDP growth (%) Inflation (average, %) Industry credit growth (ye, %) 9,2% 6,9% 2,2% 2,3% 2,3% 5,9% 5,6% 5,8% 6,1% 4,6% 4,4% 4,0% 4,7% 4,6% 4,4% 4,7% 4,2% 21 22 23 24 25 26 27 21 22 23 24 25 26 27 Prime interest
Slide 60: Short-term guidance (2025)
Short-term guidance (2025) 2024 2025 guidance1 Around mid-single digits NII +1% Stronger loan growth (wholesale biased), partially offset by growth NIM compression (asset mix, pricing pressure, endowment) Around the midpoint CLR 87 bps of the group’s TTC target range (60 bps to 100 bps) NIR +10% Upp
Slide 61: Updated guidance for 2025 and beyond
Updated guidance for 2025 & beyond Cost-to- Net DHEPS ROE income ratio Promoter growth Score 2025 > CPI + GDP (medium- 17% 52% #1 bank term targets + 5% (COE + 2%) set in 2023) (CAGR to end-2025) Updated 2025 > Mid-single guidance1 digits >16% Increase yoy #1 bank (for FY 2025) Medium > CPI + GDP te
Slide 62: Thank you
Thank you NEDBANK GROUP LIMITED – 2024 Annual Financial Results 62
Slide 63: Disclaimer
Disclaimer Nedbank Group has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this document, including all information that may be defined as 'forward-looking statements' within the meaning of United States securities le