Nedbank CEO Jason Quinn says the company has received “strong” support from investors should it decide to sell its stake in West African lender Ecobank.
This comes as the group pivots to the fast-growing East African region for growth.
In his letter to shareholders published in the group’s latest annual report, Quinn said the review of its investment in Ecobank, whose official name is Ecobank Transnational Inc (ETI), was in full swing, with a possible sale on the table.
“We have announced that we are finalising a strategic review of our financial investment in ETI. Recent engagements with the investment community highlighted strong support should we decide and be able to sell our share,” he said.
The two lenders initially formed an alliance in 2008, with Nedbank buying 21% of Ecobank in 2014 for about $500m.
Ecobank has a presence in more than 30 countries, mainly in Central and West Africa. Under Quinn’s leadership, Nedbank is undergoing a refresh, with growth in Africa top of mind.
The company plans to leverage its assets to expand, strengthen and transform its presence in the Southern African Development Community (Sadc) region and East Africa, “where economic growth is expected to be higher than SA”.
SA banks have made big investments on the rest of the continent where many markets have higher unbanked populations, presenting huge potential for growth in retail and mobile banking and other financial services.
Standard Bank, Africa’s biggest lender by assets, has a large presence on the continent. Its Africa regions portfolio comprises 19 countries — which contribute more than 40% to its earnings. Absa also has a big presence on the continent, which is home to some of the world’s fastest-growing economies.
Nedbank still derives much of its revenue from SA. According to the group’s annual report, the company’s SA franchise contributed 90% of the group’s R1.4-trillion of assets and 79% of R16.9bn headline earnings in financial year 2024.
The group operates in six countries in Sadc through subsidiaries and banks in Lesotho, Mozambique, Namibia, Eswatini and Zimbabwe. It also has a representative office in Kenya, East Africa’s economic powerhouse.
“Some countries on the African continent offer opportunities for higher growth and returns, and we plan to leverage our skills, expertise and strengths to unlock value in selected markets such as East Africa,” Nedbank said.
“We will leverage our strengths in CIB [corporate and investment banking] to expand into East Africa and grow our deposit market share further, with a focus on transactional deposits as we expand our transactional banking franchises across retail, commercial and corporate.”
Nedbank’s growth ambitions in East Africa will not be easy though — fierce competition awaits, including Standard Bank, which has assets of R3.3-trillion.
Standard Bank has also set its sights on East Africa, stating it plans to use “macroeconomic and trade opportunities within East Africa, along the East Africa corridor, and between East Africa and its trading partners to grow our market share and deepen our share of the wallet”.
Nedbank expects better growth in SA this year as its baseline scenario, which highlights a better environment for the company and its clients compared with the past 10 years.
According to the lender’s base case scenario, “GDP growth gathers pace from 2025 given less severe load-shedding and smoother logistics, but growth remains below 2% for the next three years”.
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