One of South Africa’s biggest companies is making a permanent work-from-home shift – as it banks on digital

Nedbank on Wednesday (11 August), reported financial results for the six months ended 30 June 2021, reflecting a strong financial recovery off a low base.

Nedbank Group said that headline earnings in H1 2021 increased by 148% on H1 2020 to R5.3 billion but remains 24% below H1 2019 levels.

Diluted headline earnings per share of R10.67, was up 146% (June 2020: R4.34), while headline earnings per share at R10.84 was up 147% (June 2020: R4.38).

Revenue of R27.6 billion was up 2% from R27.19 billion in June 2020, while the group declared an interim dividend of 433 cents per share (June 2020: no interim dividend declared).

After a volatile and difficult year for the South African banking sector in 2020, the first half of 2021 saw client activity rebounding and market volatility returning to more normalised levels, although corporate deal flow across various sectors remained muted, the group said.

“Operating conditions in the first half of 2021 were better than we had expected at the start of the year, helped by improved commodity prices. This was evident in upward revisions to SA GDP growth, vaccine rollouts gathering pace and positive developments on key reforms,” said Mike Brown, Nedbank chief executive officer.

“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.”

Digital change

Nedbank noted that branch teller transactions declined 18%, while digital payments and transfers grew 34%.

Brown said that the group’s digital initiatives helped the bank increase the number of digitally active local retail clients by 27% year-on-year to 2.35 million (H1 2020: 1.85 million). This now represents 33% of total clients (H1 2020: 25%) and 61% of main-banked clients.

Retail digital transaction volumes in South Africa increased by 33% and transaction values by 27%.

The digitisation of services in Nedbank Retail and Business Banking, along with the impact of the lockdowns, has enabled the group to increase digital service volumes by 187% and reduce branch teller volumes by 42% year-on-year.

To date, branch floor space has decreased by almost 59,000 m2 and by around  13,000 m2 year-on-year, while employee points of presence declined by 26 year-on-year to 546, Brown said.

He noted that over the past 12 months, the total group headcount declined by 1,117. “We have not retrenched any employees as a result of Covid-19 and have paid our 27,580 employees’ salaries and benefits of R8.7 billion,” said the chief executive.

  • The number of employees (permanent staff) declined to 27,561, down 3% from 28,559  a year ago, and from 28,271 in December.
  • The number of employees (permanent and temporary staff) was down 4% to 27,580, from 28,697 in June 2o20.

“Through our strategy of consolidating and standardising corporate real estate, our number of campus sites (offices) has decreased from 31 to 26 over the past three and half years, with a longer-term target of 19. Since 2016 we have saved over 79,000 m2 and we saved over 10,000 m2 in H1 2021 alone.

“In the next few years, we will continue to optimise the portfolio by enhancing workstation use by enabling flexible office constructs to support more dynamic ways of work, as well as leveraging successful work-from-home experiences as a result of Covid-19, while creating further value and cost reduction opportunities,” said Brown.

“Our optimal work mix is expected to settle around 60% at Nedbank premises and 40% as a mix of hybrid and permanent work-from-home models.”


Looking ahead, Brown said that South Africa’s economic recovery remains threatened by new waves and variants of Covid-19 infections, and more recently and unexpectedly, by the violent unrest and looting in parts of the country in July 2021.

The bank said that during the first week of unrest, 226 branches (52% of total branches) and 60 Boxer stores (55% of stores) were closed, and in total 55 (10% of total branches and stores) of these were vandalised.

In addition, 325 ATMs (8% of total ATMs) were vandalised.

“Accelerated structural reforms remain the key to unlocking faster economic growth and job creation over the medium to longer term. There have been some encouraging developments on this front, including the concession made to allow 100 MW of embedded generation and evidence of greater resolve to eradicate corruption,” said Brown.

“The surge in unemployment and poverty caused by a long period of weak economic growth and amplified by the pandemic lockdowns and factional political battles all contributed to the protests in July.

“Sadly, the destruction of infrastructure and businesses will discourage investment and trigger more job losses, aggravating poverty and social tensions even further and the cost of the damages to property will largely be borne by taxpayers through Sasria, the state monopoly for riot insurance. Within this context, downside risks to the economic outlook remain,” Brown said.

Forecasting remains difficult in a volatile environment, he said, but the bank expects the country’s GDP to increase by 4.2% in 2021 having reduced from a previous expectation of 5%, taking into account the estimated 0.4% negative impact of recent civil unrest and looting in addition to the negative 0.4% impact from the move to adjusted level 4 lockdown.

Brown said that given progress on the group’s strategy and the strong growth in HEPS and EPS in H1 2021, “our current guidance on financial performance for the full-year 2021 is to grow HEPS and EPS by more than 20%”.


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One of South Africa’s biggest companies is making a permanent work-from-home shift – as it banks on digital