Africa-Press – South-Africa. Nedbank said on Friday it had started a process to look for a successor to CEO Mike Brown, who has been in the position since 2010.
Following the appointment of new board chair Daniel Mminele with effect from Friday, the banking group said it would now be looking for a replacement for Brown, who joined the group 30 years ago and has been an executive director since 2004.
The 57-year-old Brown “continues to enjoy the total confidence of shareholders and the board”, it said, and will continue in his role until a successor has been chosen and a suitable handover process has been completed.
Nedbank made the announcement on Friday ahead of its annual general meeting, and also provided investors with a trading update for its four months to end-April.
The group said trading conditions had deteriorated and its credit-loss ratio was higher than management’s expectations, rising to above the upper end of its 2023 guidance of between 0.8% and 1%.
This reflected the fallout from higher interest rates, load shedding and inflation, the lender said. Nedbank also slashed its 2023 economic growth forecast for SA to 0.2%, from 0.7% previously.
Relatively weak local growth prospects, slow progress in tackling corruption and the potentially severe economic consequences of the US reaction to allegations that SA may have aided Russia have added to SA’s risk premium.
Revenue, however, was higher than expected, with the company saying it was boosted to some extent by the endowment effect that higher interest rates have on loan repayments.
Banks usually get a profit boost from higher interest rates, at least in the short term. Their massive cash balances earn higher interest, and their net interest margins generally improve.
“While currently the economic benefits of increased endowment income are greater than the increase in impairments, this benefit is narrowing and is likely to reverse with further interest rate increases,” it said.
Non-interest revenue was, however, also ahead of management’s expectations. “Fee and commission growth was solid, driven by client transactional activity, cross-sell and main-banked client growth as well as a good performance in asset management,” it said.
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Shares in Nedbank were down more than a percent on Friday morning, and have lost more than 4% so far in 2023.
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