File picture: Jason Boud/ANA

JOHANNESBURG - Banking group Nedbank on Tuesday reported a 3.5 percent increase to R14.35 in headline earnings per share for the six months ended June 30, while revenue climbed 5.5 percent to R27.693 billion.

Nedbank declared an interim dividend per share of 720 cents, up 3.6 percent from last year.

The bank said the South African economy had performed worse than expected in the first six months of 2019 and cut its forecast for GDP growth to 0.5 percent from 1.3 percent.

"Significantly more urgency is required with the implementation of structural reforms to stem the economic and fiscal deterioration currently being experienced in the SA economy," chief executive Mike Brown said.

"If we are unable to do this, all the hard work done on maintaining our last investment grade rating from Moody’s will be in vain, at great cost to all South Africans as a result of higher inflation and higher interest rates, as well as lower growth and lower levels of employment than would otherwise have been the case."

In the context of slower-than-expected GDP growth, Nedbank said it had slightly revised its guidance for growth in diluted headline earnings per share for 2019 to around nominal GDP growth, from previously greater than or equal to nominal GDP growth).

Revenue growth was ahead of cost growth, resulting in pre-provisioning operating-profit growth of seven percent and the cost-to-income ratio improving to 55.4 percent, the bank said.

It said it had reached a key milestone in its journey to position itself as a market-leading digital bank in June as it operationalised a new and materially faster digital on-boarding capability for individual clients in all our branches, alongside the ability to sell both a current account and personal loan digitally.

"Initial client feedback has been excellent, and we remain hard at work to deliver a similar capability for juristic client on-boarding as well as the first release of an exciting new loyalty and rewards programme in the second half of 2019," Brown said.

- African News Agency (ANA)