Africa-Press – Eswatini. Nedbank Eswatini Limited’s headline earnings, for the six months ended June 30, 2023, were E65.2 million, which was an increase of about 30 per cent.
The earnings or net income after taxation (E65 203 049) made in the six months period in 2023 increased when compared to the earnings realised in the six months period ended June 2022, which was E50 079 759. According to the bank’s interim financial results for the six months ended June 30, 2023, the bank’s net interest income improved by 30 per cent. The bank noted that while the underlying asset loans and advances only increased by two per cent, the bank’s income from lending benefitted from the cumulative 325 basis points rised in interest rates over the last 12 months.
Investments
The bank had also benefitted from interest earned on investments that include treasury bills and bonds over the same period. Nedbank Eswatini further reported that the impairment charge for the year increased to E39.5 million (2022: E20.2 million). The bank said with the consecutive increases in interest rates, customers within the consumer and SMEs (small and medium-sized enterprises) segments’ ability to service their debt has deteriorated, which has led to increased impairments. It is worth noting that over and above the impact of the higher interest rates, SMEs exposed to the sovereign were impacted by the delays in payments by the government. “We anticipate this arrears situation to improve, following the commitment by the Ministry of Finance to pay government suppliers in July 2023,” read the statement.
The bank continued to pursue the model of migrating its customers onto the digital platforms, as well as landing new digital solutions such as Mobimoney, thus increasing non-interest revenues by six per cent to E95.9million (2022: E90.6 million). The growth in non-interest revenue through volumes was hampered by new regulations, which placed a ceiling on revenue charged on loan establishment fees, which came into effect on January 1, 2023. On economic overview, the bank highlighted that from 2022 to 2023; Eswatini’s economy has faced numerous shocks, both domestic and as a result of external events, but it has remained resilient.
Prices
Inflationary pressures increased in 2022, mostly attributable to increased prices of commodities such as energy, food and transport, reflecting the impact of the war in Ukraine. It was noted that the Central Bank of Eswatini (CBE) adopted a contractionary monetary policy stance in 2022 and continued with it in the first half of 2023. Interest rates rose by a cumulative 325 basis points in the period between June 2022 and June 2023, in response to the inflationary pressures. Inflation is now on a downward trajectory and interest rates are expected to decline in the second half of 2023. The first of these cuts was announced during the Monetary Policy Committee (MPC) sitting on July 21, 2023, with a 25 basis points cut.
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