Table of Contents
Key Points:
- Nedbank has reduced its office space by more than half since 2016, cutting from 381,000m² to 180,000m² by mid-2024.
- The shift to a hybrid work model and digital transformation have driven reductions in office and branch floor space.
- Despite the reductions, Nedbank’s total cost of occupancy has remained stable, with only a nine-percent reduction in employees since 2020.
Nedbank, under the leadership of South African banker Jason Quinn, has drastically reduced its office space across South Africa and the SADC region.
Since 2016, the bank has cut its corporate real estate floor space from 381,000m² to just 180,000m² by June 2024. This strategic move aims to consolidate and standardise its buildings as the bank adapts to a hybrid work model.
Despite rental and administrative cost increases, the total cost of occupancy remained almost unchanged, at R1.095 billion ($684,375) in the first half of 2024 compared to R1.091 billion ($681,875) in 2019.
This is largely due to the bank’s effective space reduction strategy, which has seen a decrease of 201,000m² in office space over seven and a half years.
A portion of the reduction, nearly 50,000m², occurred in 2020 as an immediate response to the COVID-19 pandemic.
Nedbank’s head office in Sandton, with around 42,000m² of commercial office space, is an example of the scale of reduction, as the bank has effectively removed space equivalent to almost five head office buildings since 2016.
However, the head office itself is not fully utilised, with available commercial listings for spaces up to 2,000m².
Hybrid work and digital transformation
The shift to a hybrid work model has been a significant driver of Nedbank’s space reduction.
Since 2020, most corporate staff have used hot desks in open-plan areas, and only 60 percent of staff are on campus on any given day. This has resulted in a desk utilisation rate of well more than 100 percent.
In addition to office space reduction, Nedbank has cut 60,000m² of branch floor space since 2020 through Project Imagine, which focuses on digitally oriented outlets.
Currently, 80 percent of branches are digitally and sales-focused, and by the end of 2025, 57 percent of branches will be smaller than 200m².
Nedbank has also enhanced its ATM network, shifting deposits to cash-accepting ATMs and reducing the number of traditional ATMs.
This digital transformation is part of the bank’s broader strategy to increase efficiency and modernise payment systems through data analytics and hyper-automation.
Despite these changes, the bank has only seen a 9 percent reduction in employees across the group since 2020. This indicates that Nedbank is utilising its space more efficiently while maintaining a stable workforce.
The bank plans to update the market on further space reductions and other efficiency improvements with its full-year results in early 2025.
