Nedbank lifts headline earnings by 11% in ‘difficult’ conditions
Consumers are under increasing pressure due to weaker global economy, record load-shedding and logistical constraints, the bank says
05 March 2024 - 08:35
by Hilary Joffe
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Nedbank CEO Mike Brown. Picture: BUSINESS DAY/FREDDY MAVUNDA
Nedbank increased its headline earnings by 11% to R15.7bn for the year to end-December on operating profit before bad debt provisions that was up 15% in an operating environment for SA banks that was “more challenging than initially forecast”, the big four banking group said.
This was outgoing Nedbank CEO Mike Brown’s last set of results after 14 years at the helm. He will step down at the group’s AGM in May to be replaced by former Absa finance director Jason Quinn, whose appointment was announced in November. Brown will stay on as a senior adviser for three months to facilitate a seamless transition.
The group said a weaker global economy, record load-shedding, logistical constraints and higher than expected inflation and interest rates had put increasing pressure on consumers’ finances and led to reductions in business confidence and investment. Its economists forecast the economy will grow by just 1% in 2024, with 75 basis points (bps) of interest rate cuts expected in the second half of the year.
Nedbank’s profit before provision for bad debts was up 15%. This was partly offset by credit impairments that increased by 30%, though this was lower than the 57% at the halfway stage.
The group, which has now achieved all the post-Covid targets it set itself in March 2021, lifted its return on equity to 15.1% as it delivered on its strategy and aims to get return on equity (ROE) to 17% by 2025 and to more than 18% in the longer term.
It reported strong earnings growth from its Africa regions off a low base, alongside solid growth from its corporate and investment banking, retail and business banking, and wealth businesses.
Nedbank’s Africa regions’ footprint is much smaller than those of rivals Standard Bank and Absa, but the group’s Southern African Development Community (Sadc) operations lifted their headline earnings by 80% to R662m while a turnaround at its associate, ETI, resulted in headline earnings more than doubling to R1.2bn.
By 9.30am Nedbank's share price has gained 4.4% to R226, putting it on track for its biggest gain in five months.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Nedbank lifts headline earnings by 11% in ‘difficult’ conditions
Consumers are under increasing pressure due to weaker global economy, record load-shedding and logistical constraints, the bank says
Nedbank increased its headline earnings by 11% to R15.7bn for the year to end-December on operating profit before bad debt provisions that was up 15% in an operating environment for SA banks that was “more challenging than initially forecast”, the big four banking group said.
This was outgoing Nedbank CEO Mike Brown’s last set of results after 14 years at the helm. He will step down at the group’s AGM in May to be replaced by former Absa finance director Jason Quinn, whose appointment was announced in November. Brown will stay on as a senior adviser for three months to facilitate a seamless transition.
The group said a weaker global economy, record load-shedding, logistical constraints and higher than expected inflation and interest rates had put increasing pressure on consumers’ finances and led to reductions in business confidence and investment. Its economists forecast the economy will grow by just 1% in 2024, with 75 basis points (bps) of interest rate cuts expected in the second half of the year.
Nedbank’s profit before provision for bad debts was up 15%. This was partly offset by credit impairments that increased by 30%, though this was lower than the 57% at the halfway stage.
The group, which has now achieved all the post-Covid targets it set itself in March 2021, lifted its return on equity to 15.1% as it delivered on its strategy and aims to get return on equity (ROE) to 17% by 2025 and to more than 18% in the longer term.
It reported strong earnings growth from its Africa regions off a low base, alongside solid growth from its corporate and investment banking, retail and business banking, and wealth businesses.
Nedbank’s Africa regions’ footprint is much smaller than those of rivals Standard Bank and Absa, but the group’s Southern African Development Community (Sadc) operations lifted their headline earnings by 80% to R662m while a turnaround at its associate, ETI, resulted in headline earnings more than doubling to R1.2bn.
By 9.30am Nedbank's share price has gained 4.4% to R226, putting it on track for its biggest gain in five months.
joffeh@businesslive.co.za
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