SENS-AI
NED Trading Statement Bullish

NEDBANK GROUP LIMITED - Further Trading Statement

Nedbank Group Limited
Full analysis

What this filing means

Nedbank's further trading statement confirms a non-cash 52-55% basic EPS drop from the Ecobank disposal while upgrading headline earnings growth to 1-3%.

Nedbank is finishing the year slightly better than expected, with its main profit measure (headline earnings) up 1-3%. A large reported drop in 'basic' profit is just a required accounting move to close the books on its Ecobank sale and doesn't affect the bank's actual cash or value.

Bull case

  • Underlying headline earnings (HEPS) are expected to grow 1% to 3% for FY25, indicating a stronger-than-expected finish to the year.
  • The 52%-55% drop in basic EPS is a non-cash accounting recycling of historical losses from the Ecobank (ETI) disposal, with no impact on actual Net Asset Value (NAV).
  • Net Asset Value (NAV) per share is projected to increase by 3% to 5%, signaling continued growth in intrinsic value.
  • Core profitability remains intact as the IFRS-mandated recycling of foreign exchange losses is explicitly excluded from headline earnings calculations.

Bear case

  • Statutory basic EPS is collapsing by 52% to 55%, which represents the final crystallization of substantial historical losses from the ETI investment.
  • Return on Equity (ROE) is guided lower at 15.3% to 15.5% compared to 15.8% in FY24, suggesting a slight dip in capital efficiency.
  • The financial information is currently unaudited, introducing a degree of reporting risk until the final results are released on 3 March 2026.
View original SENS announcement

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

Nedbank has clarified the financial impact of its Ecobank (ETI) exit, confirming that the massive 52-55% basic EPS decline is a technical accounting recycling of historical losses with no impact on NAV. More importantly, the group reported a 'slightly stronger finish to the year,' lifting HEPS guidance to a 1-3% increase and NAV growth to 3-5%. While the ROE compression to ~15.4% is a minor headwind, the market has correctly identified this as a 'clearing of the decks' event, as evidenced by the stock trading near 52-week highs at a reasonable 7.6x forward P/E. Investor Takeaway: This is a positive 'continuation' event where robust core operations are overshadowing a well-telegraphed accounting hit from a legacy disposal.

The upgrade to HEPS guidance is a credible signal of operational momentum. Maintain core holdings as the ETI overhang is now fully quantified and priced.

Decision framework

Current stance: Neutral

Key drivers

  • Underlying headline earnings (HEPS) are expected to grow 1% to 3% for FY25, indicating a stronger-than-expected finish to the year.
  • The 52%-55% drop in basic EPS is a non-cash accounting recycling of historical losses from the Ecobank (ETI) disposal, with no impact on actual Net Asset Value (NAV).
  • Net Asset Value (NAV) per share is projected to increase by 3% to 5%, signaling continued growth in intrinsic value.

Key risks

  • Statutory basic EPS is collapsing by 52% to 55%, which represents the final crystallization of substantial historical losses from the ETI investment.
  • Return on Equity (ROE) is guided lower at 15.3% to 15.5% compared to 15.8% in FY24, suggesting a slight dip in capital efficiency.
  • The financial information is currently unaudited, introducing a degree of reporting risk until the final results are released on 3 March 2026.

What would change the view

  • Guidance and cash-flow quality both improve materially from current baseline.
  • Subsequent filings remove current uncertainty and confirm durable execution.
  • Market structure/positioning shifts enough to support a directional thesis.

Evidence from the filing

  • Slightly stronger finish to the year than expected

    “In addition, following a slightly stronger finish to the year than expected, the group discloses the following estimated ranges for HEPS, diluted HEPS, NAV per share and return on equity ('ROE'):”

  • HEPS expected to increase by 1% to 3%

    “HEPS (cents) 3 631 3 667 3 740 YoY change +1% +3%”

  • Disposal losses excluded from headline earnings

    “The recycling of the cumulative foreign exchange and fair value losses recognised via OCI is specifically excluded from headline earnings and therefore has no impact on headline earnings per share ('HEPS') and diluted HEPS.”

  • NAV per share projected to increase 3% to 5%

    “NAV per share (cents) 24 039 24 760 25 241 YoY change +3% +5%”

  • Basic EPS decline of 52%-55%

    “Basic EPS (cents) 3 610 1 625 1 733 Year on year ('YoY') change (55%) (52%)”

  • Return on Equity (ROE) forecasted to deteriorate

    “ROE 15.8% 15.3% 15.5%”

  • Financial information is unreviewed

    “The financial information on which this further trading statement is based has not been reviewed or reported on by the group's joint auditors.”
Category
Trading Statement
Published
Feb 26, 2026

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