Home Business Nedbank Group achieves profit targets

Nedbank Group achieves profit targets

by Lesotho Times
0 comment

Mohalenyane Phakela

THE Nedbank Group has once again achieved a stellar performance, attaining all its targets for the financial year ended 31 December 2023.

According to the bank’s managing executive: Nedbank Africa Regions (NAR), Terence G Sibiya, the financial institution grossed M15.7 billion in earnings despite a challenging operational environment, an 11 percent increase from the previous year.

The results are for the NAR group which encompasses Lesotho, South Africa, eSwatini, Mozambique, Namibia and Zimbabwe as well as representative offices in Ghana and Kenya. The Nedbank Group also has a 21,2 percent shareholding in Ecobank Transnational Incorporated (ETI), which is a leading private pan-African banking group present in 35 sub-Saharan African countries in Francophone West Africa, Nigeria, Anglophone West Africa and Central, Eastern and Southern Africa (CESA).

Dr Sibiya told the Lesotho Times in a virtual interview on Tuesday that the headline earnings in the NAR had increased by 94 percent to M1.9 billion from the 2022’s M977 million, with the return on equity (ROE) improving to 25.2 percent from the previous year’s 13.8 percent.

Ecobank Transnational Incorporated (ETI) reported higher headline earnings of more than 100 percent to M1.229 billion compared to 2022’s M610 million.

Headline earnings is the method used to measure the profitability or performance of a business from its core operations. In other words,

headline earnings is the part of a company’s earnings that pertains to its core business activities. It removes once off items like write downs, cost cutting and other extraordinary items like tax liabilities.

“I am delighted that the group delivered a strong performance and I am of course incredibly pleased that the NAR business delivered a stellar performance because of improved performances from the Southern African Development Community (SADC) managed operations and strong earnings from our Ecobank Transnational Incorporated (ETI) associate investment and the reversal of the M175 million provision that Nedbank raised in 2022 in lieu of the Ghana sovereign debt situation,” Dr Sibiya said.

“Our SADC operations delivered headline earnings of M662 million, up by 80 percent from 2022’s M367 million and an ROE of 9.9 percent from 5.9 percent in 2022. This was a result of strong growth in revenue, up 21 percent to M4.29 billion, largely driven by an expansion in net interest margin (NIM) and net forex gains in Zimbabwe. This strong growth in revenue was achieved despite increased reserve requirements in Mozambique and muted economic growth across the regions.”

Among other things, the SADC performance was improved by higher interest rates, loans and advances growth across the region and the impairment charge which increased by 15 percent to M253 million, offset mainly by an improvement in arrears management in Lesotho.

In the first half of 2023 the group introduced Nedbank MobiMoney, an electronic wallet-based account, which forms part of the bank’s efforts towards financial inclusion. Dr Sibiya said the mobile money app was performing well in Lesotho, Eswatini and Namibia.

“Our focus currently across Nedbank’s SADC operations is to transform the business and converge our technology infrastructure, enabling closer alignment to the South Africa business so that a client in Maputo has the same experience as a client in Mbombela, or Maseru or Bloemfontein. Our ‘harmonisation’ journey is under way and progressing well and will enable the business to unlock greater efficiencies and provide a more consistent brand experience to clients across our markets,” Dr Sibiya said.

The Nedbank Group declared a final dividend of 1 022 cents per share, up by 18 percent from 866 cents per share in 2022, bringing the total dividend for 2023 to 1 893 cents per share, up by 15 percent from 1 649 cents the previous year.

For his part, the Nedbank Group’s Chief Executive (CE), Mike Brown, said the highlight of the year was achieving all the group’s post-Covid targets for 2023 which were set in March 2021.

“As I reach the final stretch of my 14 years as CE of Nedbank Group, I look back with pride on our achievements and the challenges we have overcome together. When I retire at the annual general meeting in May 2024 and hand over to Jason Quinn, I know I leave behind a better Nedbank than what I was entrusted with, and that Jason and the Nedbank team will inherit strong foundations from which to build an even better future for all our stakeholders,” Mr Brown said.

Mr Brown is stepping down after more than a dozen years at the helm of one of Africa’s major financial institutions. He is being replaced by Mr Quinn, from another African banking giant, ABSA.

Nedbank Lesotho Managing Director, Nkau Matete, is yet to disclose Lesotho’s sole performance and contribution to group profits. He said they were still awaiting the Central Bank of Lesotho’s appraisal of Nedbank Lesotho’s financial statements before releasing them.

 

You may also like

Leave a Comment

Lesotho’s widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa. 

@2023 – Lesotho Times. All Rights Reserved.