JSE:NED

Stock Analysis Report

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Executive Summary

Nedbank Group Limited, through its subsidiary, Nedbank Limited, provides various wholesale and retail banking services in South Africa and internationally.


Snowflake Analysis

6 star dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Nedbank Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NED's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.8%

NED

5.8%

ZA Banks

-0.7%

ZA Market


1 Year Return

-62.3%

NED

-48.1%

ZA Banks

-23.8%

ZA Market

Return vs Industry: NED underperformed the ZA Banks industry which returned -47.8% over the past year.

Return vs Market: NED underperformed the ZA Market which returned -23.6% over the past year.


Shareholder returns

NEDIndustryMarket
7 Day11.8%5.8%-0.7%
30 Day-7.9%-2.5%-0.6%
90 Day-44.1%-34.6%-8.1%
1 Year-58.6%-62.3%-44.3%-48.1%-13.0%-23.8%
3 Year-44.7%-54.8%-18.3%-31.3%0.3%-18.8%
5 Year-42.7%-58.1%-10.1%-32.7%9.9%-17.5%

Price Volatility Vs. Market

How volatile is Nedbank Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Nedbank Group undervalued compared to its fair value and its price relative to the market?

3.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NED (ZAR98.78) is trading above our estimate of fair value (ZAR11.15)

Significantly Below Fair Value: NED is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NED is good value based on its PE Ratio (4x) compared to the Banks industry average (4.4x).

PE vs Market: NED is good value based on its PE Ratio (4x) compared to the ZA market (8x).


Price to Earnings Growth Ratio

PEG Ratio: NED is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: NED is good value based on its PB Ratio (0.5x) compared to the ZA Banks industry average (0.6x).


Next Steps

Future Growth

How is Nedbank Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

3.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NED's forecast earnings growth (3.8% per year) is below the savings rate (9.5%).

Earnings vs Market: NED's earnings (3.8% per year) are forecast to grow slower than the ZA market (19.2% per year).

High Growth Earnings: NED's earnings are forecast to grow, but not significantly.

Revenue vs Market: NED's revenue (6.6% per year) is forecast to grow slower than the ZA market (8.5% per year).

High Growth Revenue: NED's revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NED's Return on Equity is forecast to be low in 3 years time (11.7%).


Next Steps

Past Performance

How has Nedbank Group performed over the past 5 years?

6.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NED has a high level of non-cash earnings.

Growing Profit Margin: NED's current net profit margins (24%) are lower than last year (26.2%).


Past Earnings Growth Analysis

Earnings Trend: NED's earnings have grown by 6.1% per year over the past 5 years.

Accelerating Growth: NED's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NED had negative earnings growth (-10.3%) over the past year, making it difficult to compare to the Banks industry average (-1.9%).


Return on Equity

High ROE: NED's Return on Equity (13%) is considered low.


Next Steps

Financial Health

How is Nedbank Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: NED's Assets to Equity ratio (11.6x) is moderate.

Allowance for Bad Loans: NED has a low allowance for bad loans (63%).

Low Risk Liabilities: 84% of NED's liabilities are made up of primarily low risk sources of funding.

Loan Level: NED has an appropriate level of Loans to Assets ratio (68%).

Low Risk Deposits: NED's Loans to Deposits ratio (89%) is appropriate.

Level of Bad Loans: NED has a high level of bad loans (3.5%).


Next Steps

Dividend

What is Nedbank Group's current dividend yield, its reliability and sustainability?

14.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NED's dividend (14.32%) is higher than the bottom 25% of dividend payers in the ZA market (4.59%).

High Dividend: NED's dividend (14.32%) is in the top 25% of dividend payers in the ZA market (12.95%)


Stability and Growth of Payments

Stable Dividend: NED's dividends per share have been stable in the past 10 years.

Growing Dividend: NED's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (56.6%), NED's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NED's dividends in 3 years are forecast to be covered by earnings (53.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Mike Thomas Brown (52yo)

10.17yrs

Tenure

R35,994,000

Compensation

Mr. Michael William Thomas Brown, also known as Mike, BCom, Dip Acc, CA (SA), AMP, serves as the Chief Executive and Executive Director of Nedbank Corporate. Mr. Brown has been the Chief Executive Officer  ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD2.04M) is above average for companies of similar size in the ZA market ($USD1.21M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Thomas Brown
Chief Executive & Executive Director10.17yrsR35.99m0.13% ZAR62.0m
Raisibe Morathi
CFO & Executive Director10.67yrsR23.51m0.062% ZAR29.4m
Mfundo Nkuhlu
COO & Executive Director5.33yrsR22.85m0.047% ZAR22.1m
Brian Kennedy
Group Managing Executive of Nedbank Corporate & Investment Banking5.33yrsR26.22m0.037% ZAR17.5m
Ciko Thomas
Group Managing Executive of Retail and Business Banking10.33yrsR23.13m0.027% ZAR12.6m
Iolanda Ruggiero
Group Managing Executive of Nedbank Wealth5yrsR14.62m0.029% ZAR13.6m
Fred Swanepoel
Chief Information Officerno datano datano data
Alfred Visagie
Executive Head of Investor Relationsno datano datano data
Anna Isaac
Group Chief Compliance Officer1.33yrsno datano data
Khensani Nobanda
Group Executive for Group Marketing & Corporate Affairs2.67yrsno datano data

5.3yrs

Average Tenure

49yo

Average Age

Experienced Management: NED's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Thomas Brown
Chief Executive & Executive Director10.17yrsR35.99m0.13% ZAR62.0m
Raisibe Morathi
CFO & Executive Director10.67yrsR23.51m0.062% ZAR29.4m
Mfundo Nkuhlu
COO & Executive Director5.33yrsR22.85m0.047% ZAR22.1m
Paul Makwana
Lead Independent Director1yrR1.81mno data
Hubert Brody
Independent Non-Executive Director2.83yrsR1.37m0.00053% ZAR251.9k
Errol Kruger
Independent Non-Executive Director3.75yrsR2.88mno data
Brian Dames
Independent Non-Executive Director5.92yrsR1.12m0.000010% ZAR4.8k
Mantsika Matooane
Independent Non-Executive Director6yrsR961.00k0.00047% ZAR223.4k
Vassi Naidoo
Independent Non-Executive Chairman5yrsR5.87m0.010% ZAR4.9m
Stanley Subramoney
Independent Non-Executive Director4.67yrsR1.80m0.00048% ZAR228.1k

5.2yrs

Average Tenure

52.5yo

Average Age

Experienced Board: NED's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Nedbank Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nedbank Group Limited
  • Ticker: NED
  • Exchange: JSE
  • Founded: 1831
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: R47.530b
  • Shares outstanding: 481.17m
  • Website: https://www.nedbank.co.za

Number of Employees


Location

  • Nedbank Group Limited
  • Nedbank 135 Rivonia Campus
  • 135 Rivonia Road
  • Johannesburg
  • Gauteng
  • 2196
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NEDJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJan 1992
NCODB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
NDBK.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
NBKNMSE (Namibian Stock Exchange)YesOrdinary SharesNAZARJan 1992
NDBK.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 1995

Biography

Nedbank Group Limited, through its subsidiary, Nedbank Limited, provides various wholesale and retail banking services in South Africa and internationally. It offers personal banking solutions, including savings deposits and investment accounts; home and personal loans, student loans, vehicle finance products, private wealth finance solutions, overdrafts, and credit cards; and investment plans and services, financial and estate planning services, and wills and trust services, as well as professional banking, wealth management, non-resident and embassy banking, insurance, stock broking, and foreign exchange services. The company also provides business banking services, such as business and tender accounts; call, fixed, and flexi deposits; loans and structured solutions; property, asset, and vehicle finance products; value added services; card and cash solutions; treasury solutions; cash management, electronic banking, and merchant payment and support services; life, asset, income and credit protection, funeral, business cover, liability cover, revenue cover, and owners’ insurance products; asset management services; and commodities, equities, fixed income, and structured credit products. In addition, the company offers corporate banking services comprising aircraft, asset based, carbon, export credit, global commodity, infrastructure, energy, telecoms, leveraged, mining, oil and gas, private equity, and public sector finance; payments and receipts, documentary credits and collections, guarantees, and trade finance; structured solutions; corporate lending and advances, and specialized distribution products; custodial services; corporate finance and debt advisory services; beta solutions; and corporate and institutional investments. Further, it provides transactional banking services. The company was formerly known as Nedcor Limited and changed its name to Nedbank Group Limited in 2005. The company was founded in 1831 and is headquartered in Johannesburg, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/30 18:34
End of Day Share Price2020/05/29 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.