NEDBANK GROUP LIMITED - Nedbank Group H1 2026 Pre-Close Investor Update

Nedbank Group H1 2026 Pre-Close Investor Update

Nedbank Group Limited                                   Nedbank Limited
(Incorporated in the Republic of South Africa)          (Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06                     Registration No. 1951/000009/06
JSE share code: NED                                     JSE alpha code: BINBK
NSX share code: NBK
A2X share code: NED
ISIN: ZAE000004875
JSE alpha code: NEDI
('Nedbank Group')
(collectively the 'group')


NEDBANK GROUP H1 2026 PRE-CLOSE INVESTOR UPDATE

Operating environment
Global economic activity slowed in the first half of 2026, with growth expectations revised downwards
as geopolitical tensions and trade disruptions weighed on confidence and investment. The escalation of
conflict in the Middle East materially disrupted energy markets and supply chains, becoming the primary
global risk and shaping inflation, trade flows, and financial conditions. After easing through 2025,
inflation accelerated at the start of the second quarter, driven mainly by higher energy and commodity
prices, increasing input costs and eroding real incomes. Monetary policy easing has largely been
measured and delayed, with central banks balancing renewed inflation risks against weakening growth,
resulting in a more cautious and uneven policy stance across regions. While the US and parts of Asia
remained relatively resilient, Europe and other regions experienced weaker growth, with emerging
markets more exposed to higher input costs, tighter financial conditions, and capital flow volatility.

SA's economic outlook, as we have noted at the start of 2026, continues to show encouraging signs of
improvement, supported by a more credible fiscal trajectory, progress on structural reforms and recent
credit rating actions. Following S&P's rating upgrade of the SA sovereign to BB (positive outlook) in
November 2025, during the first few months of 2026 Moody's affirmed its SA sovereign Ba2 rating and
revised the outlook to positive, while Fitch upgraded SA's long-term foreign currency rating from BB- to
BB with a stable outlook.

In SA, the operating environment during the first five months of 2026 ('5M 2026') was mixed. Real GDP
growth surprised on the upside in the first quarter, expanding by a slightly faster 0.5% qoq, supported
by strong contributions from finance, agriculture, domestic trade and transport. Most of the momentum
came from a significant improvement in SA's net trade position, but domestic demand contracted over
the quarter, hurt by a sharp rundown in inventories, a relapse in fixed investment and a marked
slowdown in consumer spending. We now expect GDP to grow by approximately 1.3% in 2026, revised
down from the 1.5% we forecasted in February 2026.
Higher fuel prices drove local inflation up from a low of 3% in February to 4.5% in May. In response, the
SARB's Monetary Policy Committee (MPC) increased interest rates by 25 bps in May, taking the prime
lending rate up to 10.5%. Inflation will likely rise further to a peak of around 4.6% in June, before easing
to about 3.2% by year-end, as global oil prices reduced in recent weeks after the US and Iran reached
an agreement to end hostilities and reopen the Strait of Hormuz. Against this backdrop, the MPC is likely
to hold interest rates at current levels until inflation trends clearly towards the SARB's 3% target, creating
space for further monetary easing in 2027.

Industry-wide credit extension strengthened modestly, with private sector credit growth rising to around
9% yoy in April 2026. Corporate credit growth accelerated into double digits, driven by increased activity
in general loans, although demand remains sensitive to weak business confidence and subdued fixed
investment. Household credit growth has improved gradually but remains relatively weak below 5%,
reflecting ongoing affordability constraints. Overall, credit growth across both corporates and
households is expected to remain positive in H2 2026, albeit at more moderate levels, as heightened
uncertainty and cautious borrowing behaviour persist.

Pre-close update

The group's financial performance in the first 5 months of the year ('5M 2026') when compared to the
first 5 months of 2025 ('5M 2025') reflects headline earnings (HE) that was broadly in line with
management expectations determined at the beginning of the year. Diluted headline earnings per
share (DHEPS) growth for FY 2026 is expected to remain slightly ahead of HE growth given the ongoing
run-rate impact of the share buybacks concluded in 2025. The 5M 2026 performance reflects improving
net interest income (NII) growth, strong non-interest revenue (NIR) growth and expenses that were well
managed, resulting in pre-provisioning operating profit (PPOP) growth. Excluding associate income,
PPOP growth was upper single digits. This growth was offset by an increase in the impairment charge
and no further recognition of associate income from Ecobank Transnational Incorporated (ETI) post the
sale of our investment in 2025 (HE of R927m was recognised in H1 2025). Excluding ETI, underlying
headline earnings growth was upper single digits.

Corporate and Investment Banking (CIB) had a good performance in 5M 2026, supported by healthy
balance-sheet growth as strong growth in Investment Banking was partially offset by slow growth in
Property Finance, a low impairment charge, strong fee and commission growth and a solid trading
performance. Business and Commercial Banking's (BCB) was negatively impacted by a once-off
single client impairment which masked good underlying core business fundamentals, evidenced in better
loan growth and double-digit NIR growth, supported by increased transactional client activity. Earnings
in Personal and Private Banking (PPB) was impacted by lower endowment income and higher
impairments, offsetting the strong momentum that continued across insurance, fee and commission
income and secured lending, while expenses were tightly controlled. Our SADC operations in Nedbank
Africa Regions (NAR) increased earnings strongly, albeit off a low base.

NII growth of low to mid-single digits for 5M 2026 was driven by average interest earning banking asset
growth of mid-to-upper single digits, offset by a decline in the group's net interest margin (NIM), driven
primarily by the run-rate impact of interest rate cuts in 2025 on endowment income, as expected. Gross
actual banking advances growth was above mid-single digits in CIB and PPB, and around mid-single
digits in BCB. We expect NII growth over the year to continue to improve to slightly above our FY 2026
guidance of around mid-single digits.

At the end of May 2026, the group's impairment charge and the annualised credit loss ratio (CLR),
which is cyclically higher at the start of the year, increased period on period, with the CLR moving into
the upper half of our through the cycle (TTC) target range of 60 bps to 100 bps. CIB's CLR remained
below its TTC range reflecting the health of corporates in South Africa and a high-quality portfolio, while
BCB's CLR increased into the lower end of its TTC target range due to a single client default. PPB's
CLR increased to slightly above the top end of its TTC target range as a result of deteriorating underlying
macroeconomic assumptions and increased delinquencies across most asset classes as affordability
remains an issue for consumers. New business origination metrics remain healthy. Our guidance is for
the group's CLR to be slightly above the midpoint of the group's TTC target range for FY 2026,
seasonally higher in H1 2026 when compared to H2 2026.

NIR growth was at upper-single digits in 5M 2026, driven by, amongst other factors, double digit growth
in insurance income, a solid trading performance and good growth in commission and fees that was
underpinned by strong growth in CIB and BCB, as well as continued growth in maintenance fees, driven
by client gains, and fees from value added services in PPB. NIR growth is expected to remain around
upper-single digits for H1 2026 and FY 2026.

Expense growth was very well managed at below mid-single digits in 5M 2026, benefiting from below
mid-single digit growth across salaries and wages, computer processing, communication and travel, and
accommodation costs. Expense growth is expected to remain below mid-single digits for H1 2026 and
FY 2026.

In summary, our FY2026 guidance remains on track and will be updated, if needed, at our 2026 interim
results.

NCBA transaction update

The Nedbank offer documents, required under Kenyan laws, were distributed to all of the NCBA
shareholders on 4 May 2026. The opening date of the offer (for purposes of accepting the offer) was 28
May 2026 and the closing date of the offer is 10 July 2026. Current expectations are that the results of
the offer (i.e. the number of acceptances received) will be announced by no later than 21 July 2026.
Regulatory approvals required for the transaction have been received from the Prudential Authority of
the SARB and other regulators outside of SA, such as COMESA Competition and Consumer
Commission and the East African Community Competition Authority, with the balance of approvals
tracking well and expected in due course. Where regulatory notifications rather than approvals have
been required, these have been made in Kenya, Uganda, and Rwanda. The indicative completion date
of the transaction (subject to regulatory approvals) remains end Q3 2026 or early Q4 2026.

Investor call

Nedbank Group CFO, Mike Davis, will host a pre-close investor call based on this release at 15:30 (SA-
time) on Wednesday, 24 June 2026. Please contact NedgroupIR@nedbank.co.za for the details of this
meeting.

Nedbank Group's results for the six months ended 30 June 2026 are currently expected to be released
on SENS on or about Tuesday, 4 August 2026.

Shareholders are advised that the financial information contained in this pre-close update has not been
reviewed or reported on by the Nedbank Group's joint auditors.

Sandton
24 June 2026

Investor Relations contact
Alfred Visagie (Head: Investor Relations)
Alfredv@nedbank.co.za
NedgroupIR@nedbank.co.za

Sponsor to Nedbank Group in Namibia:
Old Mutual Investment Services (Namibia) (Pty) Ltd

Sponsor to Nedbank Group in South Africa:
Nedbank Corporate and Investment Banking, a division of Nedbank Limited


Debt Sponsor to Nedbank Limited:
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 24-06-2026 08:00:00
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