Staff Writer
SADC operations in Nedbank Africa Regions (NAR), which includes Namibia, increased earnings strongly, albeit off a low base, in the first half of this year.
The performance came within a broader context of uneven global economic conditions, shifting inflation dynamics and resilient but constrained domestic growth across Nedbank Group’s key markets.
This reflected improved momentum across regional markets. Net interest income growth was driven by mid-to-upper single-digit asset growth, partially offset by margin compression due to prior interest rate cuts.
Global economic activity slowed in the first half of 2026, as growth forecasts were revised downward amid rising geopolitical tensions and persistent trade disruptions that weighed on confidence and investment.
Escalating conflict in the Middle East disrupted energy markets and global supply chains, emerging as a dominant risk factor influencing inflation, trade flows and financial conditions.
After easing through 2025, inflation picked up again in early 2026, driven largely by higher energy and commodity prices, which increased input costs and eroded real incomes.
In South Africa, economic conditions showed encouraging but uneven improvement. The country benefited from a more credible fiscal trajectory, ongoing structural reforms and supportive credit rating actions.
Following S&P’s upgrade of South Africa’s sovereign rating to BB with a positive outlook in November 2025, Moody’s affirmed its Ba2 rating and revised its outlook to positive in early 2026, while Fitch upgraded its long-term foreign currency rating from BB- to BB with a stable outlook.
Domestic growth surprised slightly to the upside in the first quarter of 2026, expanding by 0.5% quarter-on-quarter, supported by strong contributions from finance, agriculture, domestic trade and transport.
However, the underlying composition of growth was mixed, with net trade improvements offset by weaker domestic demand, including declining inventories, softer fixed investment and slowing consumer spending.
Full-year GDP growth is now expected at approximately 1.3%, down from an earlier forecast of 1.5%.
Inflation in South Africa rose from 3% in February to 4.5% in May, largely due to higher fuel prices. In response, the South African Reserve Bank increased the repo rate by 25 basis points in May, lifting the prime lending rate to 10.5%.
Inflation is expected to peak at around 4.6% before easing to approximately 3.2% by year-end, supported by moderating global oil prices following easing geopolitical tensions in key energy routes.
Monetary policy is expected to remain on hold in the near term, with potential easing only likely in 2027.
Within this environment, industry credit growth improved modestly, with private sector credit expansion rising to around 9% year-on-year in April 2026.
Corporate lending strengthened into double digits, while household credit growth remained subdued below 5%, reflecting ongoing affordability pressures and cautious consumer behaviour.
