Leemisa Thuseho
THE Nedbank Group has delivered a strong performance in first half of the year which saw its headline earnings increasing by 8% to M7.9 billion.
The interim financial results for the first six month ended on 30 June 2024 indicate that the group’s return on equity (ROE) also improved to 15,0% from 14,2% in the prior period.
The group’s headline earnings per share (HEPS) have increased by 11% to 1 699 cents, diluted HEPS (DHEPS) increased by 12% to 1 650 cents and basic earnings per share (EPS) increased by 12% to 1 700 cents, ahead of the headline earning growth of 8%.
Moreover, following the solid performance, the group declared an interim dividend of 971 cents per share, up by 11,5% (June 2023: 871 cents per share) at a payout ratio of 57%.
According to Nedbank Chief Executive Jason Quinn the group delivered the strong performance despite the challenging operating environment citing that the economic activity remained weak.
The economic activity was impacted by geopolitical uncertainty, high interest rates, persistent inflation and general uncertainty ahead of the national elections in South Africa (SA) amongst others.
“The operating environment in the first half of 2024 was challenging as economic activity remained weak,” Mr Quinn said.
“In addition to geopolitical uncertainty, persistent inflation, high interest rates and uncertainty ahead of the national elections in South Africa (SA) impacted domestic activity negatively.”
Quinn said the group is optimistic to make progress towards the medium-term targets and increase the ROE by 17% by 2025.
“Our relatively strong financial performance in H1 (first half fiscal year) 2024, including the progress made in executing on our strategy and better economic prospects, give us confidence in making progress towards our medium-term targets and our aim to increase our ROE to 17% by 2025 and above 18% in the long term.”
On his part during a virtual press conference on Tuesday, Dr Terence Sibiya, Group Managing Executive: Nedbank Africa Regions (NAR) said Nedbank’s Africa Regions said the group’s technology platforms have also shown significant growth.
“We have seen a significant increase in our digitally active clients, our numbers have grown by 9% to 379000 clients,” Dr Sibiya said.
Coming to the NRA financial performance he said the headline earnings decreased by 36% to M725m and an ROE of 18,2% was generated.
“This performance was driven by decreases in headline earnings in the Southern African Development Community (SADC) operations and the performance of our Ecobank Transnational Incorporated (ETI) associate investment during the first six months of the year,” Dr Sibiya said.
He further indicated the SADC operations decreased by 41% to M271m and its ROE decreased to 7,3%.
He said these decreases were largely because of changes in the functional currency for Zimbabwe to the US dollar, causing the non-repeat of the unrealised forex gains from the prior year.
The NAR business has operations in Lesotho, eSwatini, Mozambique, Namibia, and Zimbabwe as well as representative offices in Ghana and Kenya.
Despite the decrease, Sibiya said NAR business remains poised to grow further.
“Nedbank’s Africa Regions business remains in really good shape and is poised to grow further. If H1 2023 once-offs and foreign currency base effects are excluded, earnings for the NAR business would have been up by 10%.”
Even though he said Lesotho is not required to report in the interim financial report. He said he was pleased with Lesotho’s year-on-year performance.
“Despite that Lesotho is not required to report in the interim financial report, I am pleased with their year-on-year performance which is more than 100% up in terms of headline earnings.
“While I can’t talk about specific numbers, but I am happy with the direction Lesotho is taking in this first half of the year with good growth in headline earnings, clients and the launching of new products like ZACA (Nedbank Zaca International Transfer) where clients can now do cross-border remittance using mobile phones,” he said.
Chief Financial Officer at Nedbank Lesotho, Mosa Seephephe also stamped that there is a significant growth on the Lesotho side and gave assurance that this will be alluded to, in the 2024 financial statement per Lesotho reporting cycles.
“Indeed, we’re encouraged by notable improvements in our performance. As a bank committed to the betterment of individuals and Businesses in Lesotho, we are happy to continue seeing a rise in deposits as we enable more options for clients’ convenience, and general improvement in our operations as an entity,” she said.
“Our flagship financial inclusion solution, the Nedbank Mobimoney wallet is also receiving some love from clients, it has enabled seamless sending and receiving of money, with a recent upgrade enabling Basotho to receive funds from South Africa straight into the wallet of our clients. And with many initiatives we anticipate having in the second half, we definitely look to end our 2024 on a high note.”
