Nedbank Group Ltd. has announced plans to sell its 21.2% stake in Ecobank Transnational Inc as it shifts focus to its core markets in Southern and East Africa following 17 years of strategic partnership with the Togo-based lender.
The South African bank said the decision follows a year-long strategic review that reclassified its holding in Ecobank from a strategic asset to a financial investment.
Nedbank noted that synergies expected from the partnership failed to materialize as Nigeria’s economy declined following the exit of key South African clients from the country.
Ecobank’s stock, which trades on the BRVM exchange in Ivory Coast, has fallen by 75% over the past decade, eroding much of the value of Nedbank’s initial $500 million investment made in 2008 and formalized into a strategic partnership in 2014.
Nedbank Chief Executive Officer Jason Quinn said the lender’s preference is to own and control its operations directly. “You can execute strategy much more deliberately when you own businesses,” Quinn said in an interview with Bloomberg.
Market reaction to the announcement was negative. Nedbank’s shares dropped as much as 5.8% in Johannesburg, trading 5.2% lower at 237 rand by 11:14 a.m., as investors expressed concern about the impact of the divestment on return on equity (ROE).
The group’s interim results showed headline earnings up 6% to 8.4 billion rand in the first half of 2025, supported by fee income growth and an 18% decline in impairments to 3.82 billion rand.
The lender’s credit loss ratio fell to 81 basis points, within its target range of 60–100 basis points for the first time since 2023. Return on equity improved to 15.2%, slightly above the estimated cost of equity at 14.8%.
Despite these gains, analysts warned that the Ecobank sale and the subsequent reduction in growth targets may weigh on investor sentiment.
“The sale of Ecobank and subsequent downgrading of full-year 2025 ROE and earnings expectations would dampen the market’s reaction to the results,” said Adrienne Damant, analyst at Avior Capital Markets.
Nedbank said proceeds from the divestment will be redeployed into opportunities in Southern Africa, particularly in retail banking and other high-growth segments.
Over the course of the partnership, Nedbank accrued associate income of 6.8 billion rand from Ecobank but received only 400 million rand in dividends.
The bank also reported cumulative foreign-currency translation and comprehensive income losses of 6.9 billion rand tied to the investment.
The Ecobank stake currently has a carrying value of 1.8 billion rand and a market value of 1.9 billion rand.
Ecobank continues to face regulatory and capital pressures. Fitch Ratings recently downgraded Ecobank Nigeria’s local rating, citing a material capital shortfall.
The bank has been in breach of the 10% regulatory capital adequacy ratio since 2024, despite regulatory forbearance.
Nedbank declared an interim dividend of 10.28 rand per share, exceeding a median estimate of 9.95 rand.