Nedbank’s top brass are in advanced discussions over the group’s investment in Central and West Africa via its stake in Ecobank Transnational Incorporated (ETI) — with a possible sale of its stake in the pan-African lender on the cards.
Nedbank and ETI 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.
The performance of Nedbank’s investment in ETI has more often than not performed below its expectations, affected by weaker economic conditions in West Africa and currency volatilities, particularly in Nigeria.
Nedbank on Tuesday said it was still reviewing its investment in ETI.
“Associate income relating to ETI for the first half of 2025 is estimated to be about R700m, up 38% compared to the R509m reported in the first half 2024. Our review of ETI as a financial investment is ongoing,” the lender said, when releasing its investor update.
Nedbank has had mixed success in its rest of Africa expansion. Africa’s population growth over the next 30 years, with a largely underbanked population and low credit penetration, has been a major drawcard for SA banks looking to diversify earnings outside the country.
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 the Southern African Development Community (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.
Jason Quinn, who took over from Mike Brown as Nedbank CEO last year, has already indicated that a possible sale of the ETI stake had been well received by investors.
“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,” Quinn said in his letter to shareholders, published in the group’s 2024 annual report.
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 Sadc region and East Africa, “where economic growth is expected to be higher than SA”.
Nedbank has said some countries on the continent offer opportunities for higher growth and returns, and the lender plans to leverage its skills, expertise and strengths to unlock value in selected markets such as East Africa.
To this end, the bank said it will leverage its strengths in corporate and investment banking to expand into East Africa and grow its deposit market share further, with a focus on transactional deposits as it expands its transactional banking franchises across retail, commercial and corporate.
Nedbank’s growth ambitions in East Africa will not be easy though — fierce competition awaits.
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”.
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