NEDBANK declared an interim dividend of 433 cents a share during the first half of this year as it resumed dividend payments following the rebound in the economy.
Chief executive Mike Brown said yesterday that operating conditions were better than expected at the start of the year.
Brown said the upward revisions to gross domestic product growth, the momentum of vaccine roll-outs and positive developments on key reforms in South Africa mirrored a pick-up in the economy.
“A 53-year-low in interest rates supported robust demand for retail credit, while transactional activity increased off a low base and benefited from ongoing strong digital growth.
“Against this progress, demand for corporate loans remained muted and excess cash was used to repay debt, particularly in the commodity sector,” Brown said.
The commodity sector has recorded super profits after riding the wave of strong commodity prices.
The bank said its financial performance in the first half of this year reflected a strong recovery off a low base.
Highlights for the half-year included the 8 percent year-on-year growth in net asset value per share and the 11.7 percent higher return on equity, up from 4.8 percent a year earlier, but still lower than 16.8 percent in 2019.
Headline earnings were up 148 percent to R5.3 billion, but 24 percent lower than the R6.8bn in the first half of 2019.
Nedbank’s counterparts, Standard Bank and Absa, expected headline earnings to increase by up to 55 percent and more than 100 percent, respectively, for the half-year to the end of June on the better-than-expected economic rebound.
The group said it was able to cut its branch teller volumes by 42 percent, and recorded a 187 percent increase in digital volumes on the digitisation of services in retail and business banking, along with the impact of the lockdowns.
“To date, branch floor space has decreased by almost 59 000m² and by around 13 000m² year-on-year compared with 46 000m² in June 2020 and 57 000m² in December 2020, while employee points of presence declined by 26 year-on-year to 546. including three since December 2020,” said the group.
Over the past 12 months, total group headcount declined by 1 117.
The group’s impairment charge decreased by 57 percent to R3.27bn, driven mainly by the 7 percent year-on-year reduction in gross loans and advances, the benefits of an improved macroeconomic environment.
The group also recorded a 72 percent year-on-year increase in transaction volumes on the Money app, with transaction values increasing by 80 percent compared to a year ago, thanks to new features introduced during the period.
The bank was not spared the looting and mayhem in parts of Gauteng and KwaZulu-Natal, with more than 3 400 employees affected, although no injuries or casualties were reported.
Nedbank shares were 1.14 percent lower to close at R181.44 on the JSE yesterday.
BUSINESS REPORT