Nedbank has had the lowest profile of the major banks over the past 20 years. But it has enjoyed a lot of continuity, as relatively new CEO Jason Quinn points out. He is just the third leader of Nedbank over that time, after Tom Boardman (2003-2010) and Mike Brown (2010-2024).
Under Boardman and then during Brown’s long tenure, Nedbank gained a reputation as steady and reliable, delivering on its promises. That was a contrast to the more quixotic approach when Richard Laubscher was CEO of Nedcor (as the Nedbank group was then called).
Laubscher ran the group from 1994 to 2003. In 1999 he broke an unwritten rule by bidding for another of the “big four”, Standard Bank. It was an intriguing battle, but in the end Trevor Manuel, then finance minister, stepped in to end it. Manuel argued that it was systemically important for South Africa to have at least four big banks. (Capitec hadn’t opened for business yet and Investec was probably still considered to be in the second tier.)
Laubscher would often say Nedcor was not a bank but a technology company. It had a strategic holding in Dimension Data, and at one point even tried to link executive pay to the DiData share price.
After the failure of the bid for Standard Bank, as a consolation prize Nedcor bought Board of Executors (BoE) for a generous R7.7bn. This bank was originally a stuffy pinstriped trust company, based in Cape Town’s historic Wale Street (its in-house publication was, inevitably, called the Wale Street Journal).
BoE had bought a string of businesses over the years, including the Natal Building Society (later rebranded NBS) and Boland Bank. And it was the only sizeable bank that Nedcor was “allowed” to buy. Perhaps Manuel would have let Nedcor buy Investec, but it is unlikely its bosses, Stephen Koseff and Bernard Kantor, would have taken such an offer seriously.
The best thing about the BoE purchase was that Laubscher acquired two successors. Boardman was BoE’s boss and Brown a senior executive there.
It is not hard to see why the two adopted a conservative approach at Nedbank, with Boardman as CEO initially and Brown his CFO. The bank was in a mess at the end of the Laubscher era, between overambitious expansion overseas, a relaxed attitude to bad debts and a messy integration process with BoE, as well as a well-publicised disaster in the merger of Nedcor’s two asset managers, Syfrets and UAL.
Laubscher had been asked to leave by Jim Sutcliffe, CEO of parent company Old Mutual, and the whole “Laubscher Gang” were soon shown the door.
The Mike Brown era certainly contrasts with the revolving door of CEOs and interim CEOs at Absa since Maria Ramos, the former National Treasury director-general and Transnet CEO, ended her 10-year stint in 2019. Quinn, who served as CFO, was interim CEO from April 2021 to March 2022 and a contender to run Absa. He lost to Arrie Rautenbach, who had run the Absa retail and business bank.
But, as it turned out, Quinn didn’t have to wait long to get his chance to run a major bank. He was chosen for the Nedbank job in November 2023, and after gardening leave (when an executive is not allowed any contact with the new employer during the notice period), he moved into the Nedbank CEO’s office in May 2024, at the age of 49.
There is only a small pool of people qualified to run a large South African bank, especially as the regulator is reluctant to let a foreign national take the job.
Says Sello Moloko, Absa group chair from 2022 to May this year: “Jason earned my great respect in the short time I worked with him. He is a man of good values with a good head on his shoulders. And he understands banking well.” Even so, Nedbank took him through a barrage of psychometric tests as part of the interview process.
Quinn was born in the Joburg area to Irish-Catholic parents and was brought up on the West Rand. He studied accounting at night through Unisa while working for Ernst & Young (later EY), where he became senior partner. He later did a master’s degree in accounting at the University of KwaZulu-Natal.
His route to the top was much like that of former Investec CEO Koseff a generation earlier — he also did not have a privileged background, in white South African terms at least.
Says Quinn: “I used to go into stockbrokers’ offices and count scrip. I even once had to measure stock by estimating the content of oil in the silos at Nola Mayonnaise, then a subsidiary of Sanlam-controlled Foodcorp.”
Unlike the shy and introverted Koseff, Quinn has the famous gregarious Ronald Reagan-style nature of the Irish. He plays golf regularly — or as regularly as a CEO’s diary allows.
“My gardening leave was the best time of my life. I managed to do a father-and-daughter road trip with my eldest girl. I know we all think we are resting and recharging during the December break, but gardening leave provides time for greater reflection.”
It is no surprise that the clubbable Quinn is a regular at the World Economic Forum at Davos, the annual get-together of global bankers. He plays a prominent part in “South Africa Day” at the mountain resort and believes strongly in the private sector and government showing a united face to the world.
Quinn is by no means an old-school bean counter. Even after a career in two large conservative institutions — EY and Absa — he says in his CV that his areas of expertise include “innovation and digital” and what he calls “cyber-resilience”. He also claims expertise in macroeconomic and public policy, doing business in emerging economies, as well as environment and climate.
Nedbank has linked its green corporate colour to green issues for decades. This emphasis has paid off, as Nedbank has a disproportionately high market share of climate change-related corporate assets (banking jargon for loans).
Nedbank CFO Mike Davis says that Quinn’s appointment has been popular with the top executives of the bank.
But there has been a remarkable stability in the C-suite, the exception being Iolanda Ruggiero, who took early retirement. The unit she ran, Nedbank Wealth, has been disbanded, with Insurance & Private Wealth moved to the retail segment and the unit trust business to Corporate & Investment Banking (CIB). There was no job of similar seniority available to Ruggiero.
But the other senior lieutenants remain: Davis, COO Mfundo Nkuhlu, Anél Bosman at CIB and Ciko Thomas at Personal & Private Banking (PPB). Nedbank has also managed to recruit Andiswa Bata from FNB — the highest-quality bank of the big four — to head its new Business & Commercial Banking unit (BCB).
This contrasts with the instability of Quinn’s old shop, Absa. He is not the only former Absa executive at Nedbank — Daniel Mminele, the former Reserve Bank deputy governor who had a short and frustrating tenure at Absa as CEO, is now the Nedbank chair. Mminele played a significant role in recruiting Quinn, jointly with lead independent director Hubert Brody, the former CEO of Imperial Holdings and later an executive at Sanlam.
Quinn is moving into a bank that has been conservative rather than bold ever since the end of the flamboyant Laubscher era. The bulk of Nedbank’s profits still derive from CIB, which produced an annualised R7.8bn in earnings in the most recent six-month reporting period (see graphic).
Nedbank’s crown jewel is commercial property finance. It provides more than a third of the debt for the sector, including majors such as Growthpoint.
The other area where it punches above its weight is retail vehicle finance, with a 36% market share. When it acquired Imperial Bank from Bill Lynch’s conglomerate, it became the preferred financier to what is now called the Motus group, after Imperial was split into Imperial Logistics and Motus (the largest motor dealership in South Africa).
Nedbank’s traditional retail footprint, however, is by far the smallest of the major banks. Quinn says he is particularly concerned about the very low share Nedbank has in the personal loans market (10%) and in credit cards (9%). Nedbank has low card penetration in spite of being the franchise holder for American Express (Amex) in South Africa.
“Too few merchants accept Amex,” says Quinn, “but we are persuading stores in upmarket shopping centres that have a significant tourist footprint, such as the V&A Waterfront and Hyde Park Corner, to start accepting Amex to get more sales to foreign tourists.”
Quinn says personal loan and vehicle finance market share “losses have slowed” (in the case of vehicle finance, off a really high base) and the bank expects to grow its shares over the next 12 months. Nedbank’s share of home loans is at about 15%; it sees its natural market share at closer to 20%.
Nedbank CIB makes a large contribution through knowledge-based fees to group earnings, but it is also contributing more to net interest revenue by finding low-risk blue chip assets (loans) in energy, infrastructure, mining and resources and commercial mortgages.
With 3.6-million main-banked clients (defined as those who put their salary cheque into the bank), Nedbank is at best half the size of its competitors. Absa, for example, has about double Nedbank’s client base. Absa has a market capitalisation of R170bn, which is less than half that of the big three by that measure — Standard Bank, FirstRand and Capitec, which all hover around a R400bn market cap.
Yet Absa is still considered substantially more valuable than Nedbank, which has had a market capitalisation over the past 12 months of between R95bn and R125bn. A few years ago Nedbank even slipped out of the all share index’s top 40 and was briefly part of the mid-cap index.
Chris Steward, veteran financial analyst at fund manager Ninety One, says Absa has had much less stability than Nedbank, but at least the red bank now has a strong CEO in former Standard Bank deputy CEO Kenny Fihla. Absa also has more potential for upside, Steward argues, through its much larger retail bank and its much larger African footprint through the former Barclays Africa business.
Quinn’s most significant decision in his first 18 months has been to dispose of Nedbank’s one-fifth holding in West African bank Ecobank.
He says there has been a reset in strategy for non-South African interests, with a clear focus on the Southern African Development Community (SADC) region and East Africa. Quinn says Kenya (still a fledgling business for Nedbank) is the most important market in East Africa by a country mile, and apart from South Africa itself, is the only territory that is likely to move the needle — once Nedbank’s banking ambitions there gain traction.
When Nedbank first established a strategic alliance with Ecobank in 2008, Quinn says, Nigeria seemed to be one of the most promising emerging markets. However, its economy didn’t perform nearly as well as expected. Various Nedbank South Africa-based clients exited their Nigerian operations, which limited cross-border opportunities, so the synergies were not forthcoming.
Quinn says though Nedbank has booked R6.8bn in associate income from Ecobank into its income statement, over the same period it has received just R400m in dividends. There was also the looming possibility, if it had kept its Ecobank holding, that Nedbank might be required to inject capital to satisfy the Nigerian regulator (which requires banks to hold more capital against deposits), or to prevent the dilution of its shareholding.
In August Nedbank announced it had reached an agreement to sell its 21.2% shareholding in Ecobank to Bosquet Investments for $100m, subject to regulatory approval.
After the disposal of Ecobank, Quinn says non-South African business will account for just 5% of group earnings. He adds that the most important territories in the SADC region will be Namibia and Mozambique, primarily because of the oil and gas resources in those countries.
Quinn has expanded Nedbank’s footprint into the SME sector through iKhokha. Nedbank has paid R1.6bn for this fintech which entrepreneur Matt Putman started in 2012. Its card machines process more than R20bn of payments annually with 200,000 SMEs. The intention is for iKhokha to remain autonomous but to leverage off the Nedbank client base. Quinn says the aim is to grow the iKhokha client base to at least a 1-million SMEs during his tenure at Nedbank. He is 50 and plans to stay in the job for least a decade.
Another important move has been the creation of the BCB cluster. This isn’t original, as Standard Bank created a similar cluster a few years ago. But as CFO Davis says, this separates personal clients, who remain in PPB, from juristic clients — companies and other nonpersonal clients such as private clubs — which move over to the BCB cluster.
Davis says PPB will be enhanced as the insurance businesses, which were previously housed in Nedbank Wealth, move over to the PPB retail cluster, allowing for more cross-selling or bancassurance.
Even though Old Mutual was Nedcor/Nedbank’s controlling shareholder for many years — and both had green as a corporate colour — the group was very bad at cross-selling either Old Mutual’s life products through Nedbank branches, or banking products through Old Mutual’s huge agency force and broker channels.
This contrasted with Standard Bank and Liberty, which even in the early 1990s generated considerable earnings through the Charter Life joint venture — despite the personal animosity between the entrepreneurial but prickly Liberty chair Donald Gordon and Standard Bank’s highly competent chief bureaucrat Conrad Strauss.
“It makes sense that bancassurance works better when the bank owns the life office,” says Quinn. “It is quite easy for a bank to give credit life policies as an option when a client takes out a personal loan, mortgage or vehicle finance. But how often will a life agent sell a credit card or home loan, when they are selling life cover or an endowment policy?”
This was a point often made by Jacko Maree when he was Standard Bank CEO.
Old Mutual, now that it is free to do so since Nedbank was unbundled in 2018, has set up OM Bank in competition with its former subsidiary. There was an Old Mutual Bank in the 1990s, but it was a division of the old Nedcor in the days when it was a multibranded business with separate banks for different markets, including People’s Bank and Permanent Bank.
Perhaps Old Mutual can prove that bancassurance will work this time around. But it won’t meet Nedbank that much in the market. Even if OM Bank is a huge success, it will not make a significant difference to Nedbank’s bottom line. OM Bank is focused almost entirely on retail clients in the lower-income groups, mainly the clients of its funeral policy unit.
Quinn says growing in the entry-level market is essential to the growth of Nedbank. It has invested billions into building what it hopes will be a compelling digital offering.
Capitec has been eating the big four’s lunch in the entry-level market over the past decade. And in Nedbank’s case, only about a third of its earnings come from its retail bank overall, never mind less affluent communities.
But as Davis told the FM, in an interview on Nedbank’s 2024 results, that Nedbank needs scale.
Neill Young, a portfolio manager at big-three fund manager Coronation, says Nedbank has the infrastructure of a big bank without the client base of FirstRand, Standard Bank or Absa. But it would rather grow the client base than cut costs.
Nedbank’s campus on Rivonia Road in Africa’s richest square mile, Sandton, has its own quadrangles and resembles an Ivy League college — very different from, say, TymeBank with a couple of rented floors in an anonymous office building in Rosebank.
On top of that Nedbank has nearly 4,000 people in Durban running its call centres and its critical AI development. Durban was the home of NBS, which the old Nedcor acquired when it bought BoE. And in Cape Town it occupies the landmark Clocktower building, which as well as being its Western Cape regional head office is the home of its highly successful Nedgroup unit trust business.
Young says Nedbank certainly looks, on the firm’s valuation models, like a very cheap share, with a mouth-watering dividend yield of 10%. But he says earnings growth is not exciting. After some accounting noise is excluded, earnings per share were up just 2.6% in the six months to June 2025. Coronation manages funds holding 3.3% of Nedbank’s shares in issue.
He says Nedbank is linked closely to the South African economy — it’s almost a perfect proxy for South Africa Inc.
By contrast, Standard Bank and Absa have large exposure to the much faster-growing rest of Africa. FirstRand has material hard currency holdings (about 10% of earnings) through Aldermore Bank in the UK.
So Nedbank’s future is inevitably linked to the future of South Africa. It has a mature client base, losing many of its most profitable clients to emigration. Nedbank and South Africa as a whole might not realise just how much difference Quinn’s Irish gift of the gab will make at next year’s Davos.
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