Nedbank to Exit Ecobank After 17-Year Alliance, Shifting Focus to Core Southern and East Africa Markets

Nedbank Group Ltd., South Africa’s fourth-largest bank by assets, has announced plans to divest its 21.2% stake in Ecobank Transnational Incorporated (ETI), officially ending a 17-year-old alliance that once defined its pan-African strategy.

The bank said the decision follows a year-long strategic review, marking a pivot toward greater focus on regions it can directly control, specifically the Southern African Development Community (SADC) and East Africa.

“The board has approved a formal plan to dispose of the investment, and we are currently engaging interested parties,” Nedbank said in a statement.

Nedbank CEO Jason Quinn disclosed that regulatory uncertainty and the potential for increased capital requirements were key factors in the move. These risks, he noted, weighed heavily on the decision to downgrade Ecobank’s position on the balance sheet—from a strategic holding to a financial investment—an accounting move that allows Nedbank to manage the stake in a way that maximizes value for its shareholders.

The South African lender initially took up the stake in ETI to gain a footprint in West Africa, where Ecobank operates one of the continent’s largest banking networks. But mounting regulatory complexities and diverging regional priorities now appear to have prompted Nedbank to consolidate its efforts closer to home.

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

The announcement came alongside Nedbank’s half-year earnings report, showing that the bank’s profit rose in the first six months through June, buoyed by strong fee income and a sharp drop in credit impairments.

Headline earnings climbed 6% to 8.4 billion rand ($469 million), while impairment charges fell 18% to 3.82 billion rand, signaling improved credit conditions. The drop in bad debts also pulled the lender’s credit loss ratio down to 81 basis points—within its board-approved range of 60 to 100 basis points for the first time since 2023.

In a show of strength, Nedbank declared an interim dividend of 10.28 rand per share, beating analysts’ median forecast of 9.95 rand.

Who Might Buy?

Nedbank’s exit could open the door for new strategic investors eager to gain or expand their foothold in Ecobank’s diverse West African markets. Some analysts believe that the move presents an opportunity for financial institutions seeking cross-border scale across both Anglophone and Francophone territories.

With operations in 38 countries, including 35 across Africa, Ecobank remains a formidable player on the continent. The group reported total assets of $28.9 billion as of March 2025 and continues to demonstrate strong financial resilience.

In its recently released Q2 2025 unaudited results, Ecobank posted a pre-tax profit of N352.92 billion, marking a 45.86% increase year-on-year and a 32% rise over Q1 2025. The performance reflects continued growth momentum and operational improvement across its core markets.

Ratings Upgrade

In July, Moody’s upgraded its outlook on ETI to “stable” from “negative,” affirming the group’s B3/Not Prime long- and short-term issuer ratings, as well as its senior unsecured debt rating. The ratings agency cited better earnings stability and improved asset quality across the group.

While the planned exit may signal the end of a cross-regional partnership, it also reflects a growing trend among African banks to concentrate on markets where they have direct control. For Nedbank, the shift appears to be less about Ecobank’s performance, which continues to improve, and more about aligning its long-term growth plan with regulatory and capital realities.

As talks with interested buyers progress, the spotlight now shifts to who steps in—and what it might mean for Ecobank’s ambitions in West Africa and beyond.