A2B Strategy | Strategy Facilitation for Financial Services

Originally published on LinkedIn, January 12, 2026

Historically, the market has not been overly demanding of Nedbank, the expectation being that it will move in line with the underlying economy, solid but unspectacular. And they play to the role well — if you take in the first 15 minutes of any of their financial presentations, they provide an excellent review of underlying economic conditions. You do this for too long though and you habituate a “victim” mentality. Market leaders are not in the habit of shrugging their shoulders and sighing that their “meh” performance was just a reflection of the “meh” economy. They look to control their own destiny. And the slow erosion of agency is non-trivial for legacy behemoths, they turn very slowly. The good news is that at the outset, the new CEO has ticked the right boxes. The question mark is whether it’s nearly enough.

Two standout decisions were effected in 2025, one internal, the other external. Depending on whether you are a “glass half full or empty” type, one might call them a strategic pivot or conversely, basic housekeeping.

Internally, the restructure — splitting retail and business banking — elevates the latter to where it should be. Structure follows strategy, and if you can’t be arsed to have a dedicated focus on business banking, you are not going to compete when literally every other competitor does. To an outside observer, not having had this in place historically is incomprehensible, if not unforgivable. The three actions taken so far — elevation in structure, the “poaching” of A-team leadership from market-dominant FNB, and the purchase of Ikhokha, signal intent. And not a moment too soon. Not only are its incumbent competitors doubling down, but Investec is putting its shoulder to the wheel, and more worryingly, Capitec has entered the game and they will do very well. The same-old, same-old has given way to a brutally competitive landscape.

And the flip-side of the restructure to elevate business is that it brings retail components (including product businesses) into the same foxhole. In the absence of this, system dissonance always exists between “product” and “segment” and huge amounts of energy are wasted overcoming internal friction. Again, a no-brainer, and astonishing that Nedbank has never simply emulated its successful peers!

Externally, the commitment to, and subsequent divestment of, Ecobank, cuts the cord with an investment that was a great idea but nonetheless produced a poor outcome. The acquisition of a (relatively) low cost option to African expansion was a solid play at inception and if regional growth and local execution had proven tailwinds rather than the headwinds they actually were, Nedbank might have done really well. Not every bet pays off, and better to cut ones losses and control what one can control. A narrower focus on Eastern and Southern Africa and a copy-paste of solid SA solutions and practices is a solid starting point for Nedbank to move to.

When you are smaller than your competitors, the concentration of limited resources in areas of strength is a non-negotiable. Whatever one’s philosophical view of the half-full glass, the above distinct execution on strategy rates an 8 out of 10. But the follow up this year needs to be aggressive.

Corporate and Investment banking does not seem to have received much of a onceover. It should be a concern that 3 of the 4 pillars of CIB (Investment Banking, Markets, and Transactional Solutions) experienced gross operating income reversals at mid-year. Only its lighthouse Commercial Property business grew. The CIB space too, is becoming extraordinarily competitive. Losing ground in the space that makes up 45% of headline earnings is an early concern!

In terms of strategic enablement, a bank’s platform is the equivalent of its engine, and so the completion of its Managed Evolution at the end of 2024 is a non-trivial achievement. Ballparkish, its journey started in 2011 with the desire to reduce 220 systems to 60. That it took 14 years and found another 30 systems that needed to be brought on board (it ended up being over 250 systems) tells you everything you need to know about just how difficult it is to work with legacy systems. But to talk of it as part of its “digital leadership” program is delusional. They have got to where they planned to get to, but that is not where they need to be. It has taken a long time to implement, the world has moved on and they are digital leaders in exactly nothing.

In a similar way, its focus on product simplification, customer experience, transactional deposits and (payments) digitization is 100% on point. But these should not be talked of as strategic levers. These are very basic hygiene factors. When the Nedbank exec look in the mirror, they should see a laggard and not a “fast follower”. A sense of urgency not comfort is required.

Looking to 2026, with spring cleaning done, there has been talk of looking for complementary acquisition targets, to enhance competitive strengths. This makes sense given scale issues. Exactly what to look for is not obvious. Of all things, Nedbanks’ historic differentiators have been commercial property- and vehicle finance. I can not think of a single reason why historically I might have encouraged my worst enemy to play in those spaces. But, remarkably they have demonstrated that if you play well in the niche spaces, “there’s gold in them thar hills”. Nedbank will need to be razor focused on “where to play” and why and additional successes may be found in unconventional spaces.

The irony of Nedbank seeking acquisitions should not escape anyone. On a PE under 7.5 (when banking stocks have been on a sector rotation tear), and a dividend yield close to 8, Nedbank is itself a dripping roast of an acquisition target. Investec and Sanlam have shown how regulatory boundary constraints can be navigated constructively when combining assets. The lessons from this will have been noted and added to the playbook for acquisitions. One way or the other, 2026 should prove definitively existential for Nedbank.

I thought to conclude with a sidebar of “opinions” on both leadership and consulting as it pertains to Nedbank. First, the new CEO has been decisive and those decisions have been 100% the right ones. But I also heard rumours that those impacted by the restructuring found out in the public domain before it had been communicated internally. And then that in the subsequent town halls to redress this, the CEO was on vacay, and a video message stood in. I hope this is unfounded. It would be very poor! The second is a sensitivity to the fact that external appointments to new leadership positions, including that of CEO, will by default send a message to existing leaders that they aren’t good enough. Capitec, FirstRand, Standard, Discovery rarely hire externally for CEO positions. The average manager/leader I know at Nedbank is at least as good as those at other banks. So, if bench strength is not a crisis, what is going wrong? Finally, the use of “proper” strategy consultants (and with Bain having left the fray, I explicitly mean either McKinsey or BCG) can only be applauded when looking to reframe strategic direction. A good diagnostic will take 3 months, a detailed implementation plan a further three. Beyond this though, a Consulting firm starts being paid to do the Executive’s jobs. But the Executive gets paid a lot too. One cannot pay two groups to do one job. I think a good rule for Boards to think of is to pay for consulting engagements exceeding 6 months out of the Executive’s share allocation bonus pool. This would focus minds all around.