Nedbank commits $662 million to expand across Africa

Timilehin Adejumobi -
Key Points
  • Nedbank commits $662 million to expand across Africa, aiming to boost non-South African profits from 9.2% to 20-40% by 2029.
  • Growth strategy includes wealth management in Kenya, women-led business funding, and stronger investment banking services in renewable energy and infrastructure.
  • Expansion faces political, regulatory, and currency risks but leverages strengths in Namibia’s mining, Mozambique’s LNG, and Kenya’s renewable energy financing.

Nedbank, a renowned financial services group led by South African banker and business executive Jason Quinn, is embarking on a transformative journey with a $662 million investment aimed at expanding its footprint across Africa.

The move is designed to reduce the bank's reliance on South Africa, where over 90 percent of its profits are currently generated, and capture emerging growth opportunities in high-potential sectors such as renewable energy, natural resources, and infrastructure.

Terence Sibiya, group managing executive for Nedbank’s Africa regions, emphasized that the strategy reflects the bank’s response to South Africa’s stagnant economy and the growing competition from rivals like Standard Bank Group and FirstRand, which have already established dominance in East and West Africa.

Targeting diversified growth across the continent

Nedbank's ambitious plan includes increasing earnings from other African markets to account for 20-40 percent of total profits by 2029, a substantial leap from the current 9.2 percent.

While the bank has operations in several African territories, these are described as “sub-scale,” necessitating aggressive market expansion.

The strategy will also explore innovative initiatives such as launching a wealth management division in Kenya and establishing a fund to support women-led small businesses across Africa. Decisions on these projects are expected within 18 to 24 months.

Leveraging strengths amid challenges

Nedbank’s expansion faces potential hurdles, including political risks, regulatory challenges, and currency volatility. However, the bank plans to leverage its strong presence in sectors like Namibia’s mining and green hydrogen industries and Mozambique’s LNG sector.

Additionally, it aims to enhance investment banking services in Kenya to meet the rising demand for renewable energy and infrastructure financing in East Africa.

Despite its African ambitions, Nedbank continues to invest domestically, committing $193 million to development projects in Cape Town.

With a market capitalization of $7.8 billion and ranking as the 22nd most valuable company on the Johannesburg Stock Exchange, Nedbank is poised to redefine its revenue structure and strengthen its position as a leading pan-African financial institution.