Mohalenyane Phakela
THE Nedbank Group has celebrated its “outstanding” performance for the first half of the year.
According to the bank’s Managing Executive, Nedbank Africa Regions, Terence G Sibiya, the financial institution achieved positive results of M7.3 billion earnings despite the challenging environment.
Dr Sibiya told the Lesotho Times in a virtual interview on Tuesday that Nedbank South Africa had realised a combined return on equity of 14.2 percent compared to last year’s 13.6 percent. He also said Nedbank’s regional clients had increased by five percent from 1 January to 30 June 2023.
The Nedbank Africa Regions (NAR) business has operations in Lesotho, Eswatini, Mozambique, Namibia, and Zimbabwe as well as representative offices in Ghana and Kenya.
Although Lesotho’s detailed performance statistics were not readily available, Dr Sibiya said the Southern Africa Development Community (SADC) region had realised headline earnings of M461 million, up more than 100 percent from M191 million in the first half of 2022 and reporting the return on equity (ROE) of 13.5 percent. This, he added, was driven largely by strong revenue growth due to the higher-interest-rates environment and unrealised forex gains.
In this 135th year of its existence, the Nedbank Group has further seen strong revenue growth which has led to interim dividends of M8.71 per share, thus 11 percent higher than last year, Dr Sibiya further said.
“Nedbank Group delivered a solid financial performance for the six months which ended on 30 June 2023 as headline earnings (HE) increased by 10 percent to M7.3 billion in a challenging operating environment,” Dr Sibiya said.
“The return on equity (ROE) increased to 14.2 percent from last year’s 13.6 percent. The increase in HE was underpinned by strong revenue growth, including associate income of 14 percent and good expense management, enabling re-provisioning operating profit growth of 22 percent. This was partially offset by a 57 percent increase in the impairment charge, particularly in the retail consumer banking segment in South Africa.
“I am incredibly pleased that the Nedbank Africa Region cluster delivered a stellar performance because of improved performances from the SADC operations and strong earnings from our Ecobank Transnational Incorporated (ETI) associate investment and the release of the M175 million Ghana domestic sovereign bond provision we took in 2022.
“Client numbers across the region grew by 5 percent, with the growth coming mostly from the entry-level banking segment due to the new Mobi Money electronic wallet offering launched in Eswatini, Lesotho and Namibia, and growth of the wealth segment, which now offers international and stockbroking services to clients in Namibia and Zimbabwe.”
Nedbank Group also has a 21.2 percent shareholding in 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).
“I am also happy that our ETI associate investment has continued to deliver an impressive performance. With the ongoing improvement in performance, ETI has declared dividends in the last two cycles,” he said.
Dr Sibiya reiterated Nedbank’s commitment to adhering to their clients’ needs, while also highlighting the bank’s loans to Small and Medium Enterprises (SMEs) in Lesotho.
“We have noted that the SMEs find a challenge in getting payments from the government. As Nedbank, we have engaged the Minister of Finance Dr (Retselisitsoe) Matlanyane on the issue to ensure that none of our clients’ assets are seized due to failure to service loans.
“There are various products in the pipeline which will ensure that we meet our customer needs. We are also sponsoring the development of solar energy in Lesotho,” Dr Sibiya said.
He also indicated that the Nedbank Group had, so far this year, won the Excellence in Mobile Banking in the Finnovex Southern Africa Awards 2023, Best Digital Bank Mozambique 2023 in the Global Banking and Finance Awards and the Top Innovations in Finance Award in Mozambique for 2023 in the User Experience category from Global Finance Magazine.
New products and services launched this first half of the year include Nedbank MobiMoney, an electronic wallet-based account, which forms part of the bank’s efforts towards financial inclusion in Eswatini.
MobiMoney is also available in Namibia and Lesotho.
Furthermore, the Nedbank Group’s outgoing chief executive, Mike Brown, said the first half of 2023 was more challenging than expected.
“In addition to a weak global economy and lower commodity prices, domestic economic activity continued to be negatively impacted by very high levels of load-shedding, logistical constraints, higher-than-expected levels of inflation and as a result higher-than-expected increases in interest rates.
“The group’s solid financial performance and strong balance sheet metrics enabled the group to declare an interim dividend of 871 cents per share, up by 11 percent, at a payout ratio of 57 percent,” Mr Brown said.
