Nedbank has revised its growth forecast for South Africa, and has called for more urgency in dealing with the economic and fiscal deterioration in the country’s economy.
On Tuesday (6 August),the group reported a 5.5% lift in revenue for the six month period ended June 2019, while diluted headline earnings per share of 1,411 cents, was up 3.7% from 1,361 cents in 2018.
“The SA economy performed worse than expected in the first six months of 2019 and our forecast for SA GDP growth for 2019 has been revised down from 1.3% to 0.5%,” chief executive officer, Mike Brown said in a statement.
“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.”
“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,” Brown said.
- Headline earnings R6,870 million, up 2.6% (June 2018: R6,696 million);
- Revenue R27,693 million, up 5.5% (June 2018: R26,242 million);
- Credit loss ratio 70 bps (June 2018: 53 bps);
- Diluted headline earnings per share 1,411 cents, up 3.7% (June 2018: 1,361 cents);
- Headline earnings per share 1,435 cents, up 3.5% (June 2018: 1,387 cents);
- Interim dividend per share 720 cents, up 3.6% (June 2018: 695 cents);
- Net asset value per share 17,794 cents, up 4.9%(June 2018: 16,956 cents).
Nedbank said that its financial performance was resilient as headline earnings increased 2.6% to R6.9 billion and we produced an ROE (excluding goodwill) of 17,9%. “Revenue growth was ahead of cost growth, resulting in pre-provisioning operating-profit growth of 7,0% and the cost-to-income ratio improving to 55.4%,” Brown said.
The chief executive said that a key milestone in the group’s managed evolution digital journey, to position Nedbank as a market-leading digital bank, was reached in June 2019 with the introduction of a materially faster digital onboarding capability for individual clients in all 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 onboarding as well as the first release of an exciting new loyalty and rewards programme in the second half of 2019,” Brown said.