Africa-Press – Eswatini. The Nedbank Group achieved all of its targets in the 2023 financial year and reported a headline earnings growth of 11 per cent to E15.7 billion.
Nedbank released its results for the year ended December 31, 2023 yesterday, which revealed strong results for the 12 months to December 31, 2023 compared with the prior 12-month period. This was despite a difficult operating environment faced in the different countries, where the bank operates including Eswatini. It was underpinned by a 12 per cent revenue growth and solid expense management and was partially offset by a 30 per cent increase in the impairment charge. However, this impairment charge was reduced from the 57 per cent increase in this charge reported in the first half (H1) of 2023. As a result, the group’s credit loss ratio improved from 121 basis points in H1 2023 to 96 basis points in H2 2023 and, therefore, reached 109 basis points for the full year.
Requirements
The bank’s balance sheet remained very strong in 2023, as it achieved CET1 and tier 1 capital ratios of 13.5 and 15.0 per cent that were well above Board-approved target ranges and South African Reserve Bank minimum requirements. The group highlighted that the diversification benefit across its portfolio of businesses was evident in very strong growth in HE from Nedbank Africa Regions (NAR), albeit of a low base, alongside solid performances with increases in both headline earnings and return on equity (ROE) from Nedbank Corporate and Investment Banking, Nedbank Retail and Business Banking and Nedbank Wealth.
Nedbank Chief Executive (CE) Mike Brown said a highlight of the year was achieving all the group’s post-COVID -19 targets for 2023 announced in March 2021. “Two of these targets were already achieved in 2022 – exceeding the 2019 diluted headline earnings per share (DHEPS) of 2 565 cents and ranking number one on Net Promoter Score (NPS). In 2023, we further increased DHEPS to 3 199 cents, up by 14 per cent year-on-year (yoy), and we maintained number one NPS ranking among South African banks. Pleasingly, at the end of 2023, we also met the remaining two targets, by reporting an ROE of 15.1 per cent ahead of the target level of 15.0 per cent and a cost-to-income ratio of 53.9 per cent, which is lower than our target of 54.0 per cent.”
Dr Terence Sibiya, Group Managing Executive, Nedbank Africa Regions, said that he was delighted that the group delivered a strong performance and he was, 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 their Ecobank Transnational Incorporated (ETI) associate investment including the release of the R175 million Ghana sovereign bond provision that Nedbank took in 2022.
Operations
The Nedbank Africa Regions (NAR) business has operations in Eswatini, Lesotho, Mozambique, Namibia, and Zimbabwe as well as representative offices in Ghana and Kenya. Nedbank Group also has a 21.2 per cent 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). “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,” said Brown.
Following solid earnings growth and strong capital and liquidity positions, the group declared a final dividend of 1 022 cents per share, up by 18 per cent (December 2022: 866 cents per share), bringing the total dividend for 2023 to 1 893 cents per share, up by 15 per cent (2022: 1 649 cents).
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