Nedbank Group Limited Update Summary Company Overview - **Company**: Nedbank Group Limited (OTCPK:NDBK.Y) - **Date of Briefing**: December 03, 2025 Key Industry Insights - **Industry**: Banking and Financial Services - **Market Conditions**: The macroeconomic environment is improving, with lower interest rates and inflation contributing to better disposable income and growth in secured lending portfolios [5][6][14] Core Financial Performance - **Non-Interest Revenue (NIR)**: Expected to grow below mid-single digits for the full year, primarily due to delays in deal flow and the impact of a one-off commercial settlement with Transnet [1][15][80] - **Expenses**: Growth in expenses was mid- to upper-single digits, with expectations to remain above mid-single digits for 2025, excluding one-off settlements [1][2] - **Return on Equity (ROE)**: Projected to be around 15% or slightly higher for the full period [2] Strategic Developments - **Share Buybacks**: Approximately 10.5 million shares repurchased for ZAR 2.4 billion at an average price of just below ZAR 230 per share [3][21] - **Acquisition of ICORCA**: Completed on December 1, 2025, aimed at enhancing presence in the SME and mass market segments [3][26] - **Organizational Restructure**: Completed in July 2025, aimed at improving the profile and performance of the Commercial Banking business [3][10] Business Segment Performance - **Personal and Business Banking (PPB)**: Strong growth in value-added services and client gains, with a focus on cross-selling following the organizational restructure [1][70] - **Corporate and Investment Banking (CIB)**: Delays in deal closures, particularly in renewable energy and infrastructure sectors, pushing expected growth into 2026 [6][62] - **Retail Loan Growth**: Notable improvement in secured lending, with a halt in market share losses in personal loans, although card lending remains weak [5][30] Risk Management and Capital Adequacy - **CET1 Capital Adequacy Ratio**: Remains above the target range of 11%-12%, indicating strong capital position [2] - **Credit Quality**: Improvement across most portfolios, with a clean corporate book and reduced watch list clients compared to previous years [17][18] Future Outlook - **Growth Projections**: Anticipated mid- to upper-single digit growth in loans and advances for 2026, driven by infrastructure spending and improved macroeconomic conditions [78] - **Market Positioning**: Focus on leveraging the ICORCA acquisition to penetrate the mass market and enhance cross-selling opportunities [26][59] Additional Considerations - **Benchmark Reform**: Transitioning from JIBAR to ZARONIA is well-managed, with no expected risks to the business [46] - **Competitive Landscape**: Noted aggressive pricing in the renewable energy sector affecting deal closures, highlighting the importance of strong client relationships [66] This summary encapsulates the key points from the Nedbank Group Limited update, focusing on financial performance, strategic initiatives, and market outlook.

Financial Data and Key Metrics Changes - Lending has grown 4.4% since year-end to £388 billion, consistent with an annual growth rate of over 4% over the past six years [3][4] - Income increased to £12.1 billion, up 12.5% compared to the first nine months of the previous year [5][7] - Operating profit reached £5.8 billion, with attributable profit of £4.1 billion, and return on tangible equity at 19.5% [7][8] - Earnings per share grew 32.4% year-on-year, and TNAV per share increased 14.6% to 362 pence [8] Business Line Data and Key Metrics Changes - Mortgage lending rose by over £5 billion for the first nine months, supported by new offers for first-time buyers and family-backed mortgages [4] - Unsecured lending grew by £2.9 billion, or 17.3%, with successful integration of Sainsbury's customers [4] - Commercial and institutional lending increased by £7.9 billion, or 5.5%, particularly in infrastructure and sustainable finance [4][5] - Deposits grew 0.8% to £435 billion, balancing volume with value in a competitive market [5][12] Market Data and Key Metrics Changes - Customer activity remains high, reflecting strong economic conditions with low unemployment and wage growth above inflation [3] - Assets under management and administration increased by 14.5% to £56 billion, contributing to non-interest income growth [5] Company Strategy and Development Direction - The company focuses on disciplined growth, bank-wide simplification, and effective balance sheet and risk management [3][7] - A new share buyback of £750 million was announced, with 50% already executed [8] - The company aims to support large-scale infrastructure programs and has committed £7.6 billion towards its 2030 Climate and Transition Finance target of £200 billion [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic environment, expecting continued growth despite inflation above the Bank of England's target [3] - Full-year guidance for income has been revised to around £16.3 billion, with returns expected to exceed 18% [7][10] - The company anticipates one further base rate cut this year, reaching a terminal rate of 3.75% by year-end [11] Other Important Information - The cost-income ratio improved by five percentage points to 47.8%, with operating expenses up 2.5% to £5.9 billion [7][12] - The CET1 ratio ended the third quarter at 14.2%, up 60 basis points from the previous quarter [15][16] Q&A Session Summary Question: Deposit momentum and non-interest income drivers - Management noted a £3.5 billion increase in deposits year-to-date, with varying trends across business lines [20] - Non-interest income showed strong momentum, particularly in cards, payments, and capital markets [23] Question: Cost growth expectations - Management reiterated cost guidance for the year, emphasizing ongoing simplification efforts [31][32] Question: Capital and CRD4 impact - Limited CRD4 impact was noted in the quarter, with expectations for more material effects in Q4 [35] Question: Loan growth sustainability - Management expressed confidence in maintaining above-market loan growth, particularly in commercial and institutional sectors [61] Question: CET1 ratio target and deferred tax assets - Management indicated ongoing discussions regarding CET1 targets, with expectations for reduced capital requirements under Basel 3.1 [83][84]

Financial Data and Key Metrics Changes - Lending has grown 4.4% since year-end to GBP 388 billion, consistent with an annual growth rate of over 4% over the past six years [3][4] - Income increased to GBP 12.1 billion, a 12.5% rise compared to the first nine months of the previous year [5][6] - Operating profit reached GBP 5.8 billion, with attributable profit at GBP 4.1 billion, resulting in a return on tangible equity of 19.5% [6][7] - Earnings per share grew 32.4% year-on-year, and TNAV per share increased 14.6% to 362 pence [7] Business Line Data and Key Metrics Changes - Mortgage lending rose by over GBP 5 billion for the first nine months, supported by new offers for first-time buyers and family-backed mortgages [4] - Unsecured lending grew by GBP 2.9 billion, or 17.3%, aided by the integration of Sainsbury's customers [4] - Commercial and institutional lending increased by GBP 7.9 billion, or 5.5%, particularly in infrastructure and sustainable finance [4][5] - Non-interest income grew due to higher fees from payments, cards, and strong performance in currencies and capital markets [5][9] Market Data and Key Metrics Changes - Deposits increased by 0.8% to GBP 435 billion, reflecting a balance between volume and value in a competitive market [5][11] - Assets under management and administration grew 14.5% to GBP 56 billion, indicating increased customer investment activity [5] Company Strategy and Development Direction - The company is focused on disciplined growth, bank-wide simplification, and effective balance sheet and risk management [3][6] - A new share buyback of GBP 750 million was announced, with 50% already executed [7] - The company aims to support large-scale infrastructure programs and has committed GBP 7.6 billion towards its 2030 Group Climate and Transition Finance target of GBP 200 billion [5] Management's Comments on Operating Environment and Future Outlook - Management noted that despite inflation above the Bank of England's target, the economy is growing with low unemployment and high levels of savings [3] - The company expects one further base rate cut this year, with rates projected to reach 3.75% by year-end [10] - Full-year income guidance has been revised to around GBP 16.3 billion, with returns expected to exceed 18% [6][10] Other Important Information - The cost-income ratio improved by five percentage points to 47.8%, with operating expenses up 2.5% to GBP 5.9 billion [6][12] - The CET1 ratio ended the third quarter at 14.2%, up 60 basis points from the previous quarter [14][15] Q&A Session Summary Question: Deposit momentum and non-interest income drivers - Management discussed that deposits are up around GBP 3.5 billion year-to-date, with different trends across business lines, and highlighted strong momentum in non-interest income driven by cards, payments, and capital markets [19][22] Question: Cost growth expectations and capital management - Management reiterated cost guidance for the year, emphasizing ongoing simplification efforts and the potential for continued cost management [30][34] Question: Loan growth sustainability and income drivers - Management expressed confidence in maintaining loan growth above market levels, with a strong track record and favorable conditions in commercial lending [60][72] Question: CET1 ratio target and deferred tax assets - Management indicated that the CET1 ratio target will be reviewed in February, with expectations for continued capital generation and a slight decrease in deferred tax asset utilization in the coming years [81][83]