Nedbank Considers Selling 21.2% Ecobank Stake After 17 Years

Nedbank Group Ltd has announced plans to divest its 21.2 per cent stake in Ecobank Transnational Incorporated (ETI), marking the end of a 17-year strategic partnership that enabled its expansion across the African continent.

Nedbank confirmed that its board has approved a formal plan to dispose of the investment and is currently engaging interested parties.

The decision follows a year-long strategic review aimed at reassessing the bank’s continental ambitions and investment priorities.

“This change represents a reset of our strategy on the rest of the continent with a clear focus on the Southern African Development Community (SADC) and East Africa regions in businesses we own and control,” the bank stated.

Nedbank Chief Executive Officer Jason Quinn explained that the review highlighted several concerns about retaining the stake in ETI, including regulatory uncertainty and the potential for increased capital requirements.

As a result, the bank reclassified the ETI holding as a financial investment, shifting its focus from strategic synergy to shareholder value extraction.

The sale, once concluded, is expected to reshape Nedbank’s Africa strategy toward markets where it maintains operational control, particularly in SADC and East Africa. Industry analysts suggest the divestment could open the door for new strategic investors keen on strengthening Ecobank’s footprint, especially in West Africa’s Anglophone and Francophone markets.

Meanwhile, Nedbank reported improved earnings performance in the first half of 2025, driven by stronger fee income and reduced credit impairments. Headline earnings rose 6 per cent year-on-year to R8.4 billion (approximately $469m) for the six months ended June, exceeding market expectations.

The bank’s credit impairments fell 18 per cent to R3.82 billion, contributing to a decline in its credit loss ratio to 81 basis points—within the board’s target range of 60 to 100 basis points for the first time since 2023.

In a further sign of robust performance, Nedbank declared an interim dividend of R10.28 per share, beating the market consensus estimate of R9.95.

The move to divest its Ecobank stake underscores Nedbank’s intent to streamline its regional focus, optimise capital allocation, and deepen control over its African operations. The outcome of the stake sale could have material implications for ETI, which operates in over 30 countries across Africa.

In a related development, Ecobank Transnational Incorporated (ETI) announced a strategic agreement to divest its stake in Ecobank Mozambique S.A. (EMZ) to FDH Bank Plc, an institution listed on the Malawi Stock Exchange.

This transaction represents a strategic change in ownership and operational management with no expected disruption to banking operations, assets or employees. EMZ is a licensed commercial bank in Mozambique, supervised and regulated by the Central Bank of Mozambique.

EMZ has four branches located in the biggest cities of Mozambique.

The bank has been operating in Mozambique since 2000, when it was incorporated as Novo Banco SARL, before changing its name in 2014 to Ecobank Mozambique SA, following an acquisition by ETI. FDH Bank Plc is listed on the Malawi Stock Exchange.

According to the company’s notice to NGX, the Bank provides superior digital banking, personal and business banking, corporate and institutional banking, treasury and investment banking, and global markets and trade finance, as well as corporate advisory services.

The acquisition will be fully financed from FDH Bank Plc’s retained earnings.

“This strategic decision aligns with our commitment to Ecobank’s Growth, Transformation, and Returns strategy, ensuring we remain a competitive and meaningful player across the markets in which we operate,” said Chief Executive Officer, Ecobank Group, Jeremy Awori.

“As a Pan-African financial institution, we continuously assess our operations to drive sustainable growth while maintaining our core mission of driving Africa’s financial integration and economic growth.”

He added: “The transfer of our Mozambique stake to FDH Bank PLC was given deep consideration to ensure the least disruption and the best outcome for employees, customers and operations.

“We are exploring strategic partnerships with FDH Bank to maintain Mozambique’s access to our pan-African digital ecosystem for seamless cross-border payments.
“While our direct presence in Mozambique is changing, our unwavering commitment to driving pan-African financial integration and economic growth across the continent remains stronger than ever,” Awori stated.

The transaction has received all the necessary regulatory approvals.

It is subject to customary conditions precedent and is expected to be completed within the 2025 financial year. Upon completion, FDH Bank PLC will assume effective control of Ecobank Mozambique SA.

This transaction has been conducted on an arm’s length basis and does not involve any related parties. Both FDH Bank Plc and ETI remain committed to keeping stakeholders informed of any material developments in line with their respective stock exchange listing requirements.

Nedbank Considers Selling 21.2% Ecobank Stake After 17 Years is first published on The Whistler Newspaper