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Nedbank on Wednesday increased its interim dividend by 7% to 610 cents per share, despite a 2.9% drop in headline earnings to R5.3 billion, in what it described as “a macro environment that has proved to be more challenging than expected”.<\/p>\n
In results for the six months ended June 2017, the group said that its managed operations produced headline earnings growth of 6.7%, driven by slower revenue growth, reduced impairments and good cost management.<\/p>\n
However, the group said its performance was negatively impacted by its share of the loss from our associate Ecobank Transnational Incorporated (ETI), which decreased the 6.7% growth in headline earnings in managed operations to an overall 2.9% reduction in headline earnings. “While risks remain, the outlook for ETI is improving,” Nedbank said.<\/p>\n
“The strategies implemented over the past few years in preparation for a tougher economic environment have positioned the group well for the recessionary conditions and the sovereign-credit-ratings downgrade that followed president Zuma\u2019s cabinet reshuffle,” said the bank’s chief executive, Mike Brown.<\/p>\n
He said that capital generation and liquidity levels are strong, “and we have a banking franchise underpinned by 7.9 million clients, 2.7 million of whom are main-banked clients”.<\/p>\n
“Our advances book is of a high quality and we have built excellent collection capabilities. In addition, in an environment of slower revenue growth, and as we accelerate the delivery of our digital products, we are intensifying our focus on cost-efficiencies to create investment capacity and to improve efficiency ratios. We aim to create a more agile, competitive and digital Nedbank.<\/p>\n
“In the context of a challenging political and economic environment, our guidance for growth in diluted headline earnings per share for 2017 is for this measure to be positive, but less than or equal to growth in nominal GDP,” Brown said.<\/p>\n
Nedbank, which employs more than 32,000 people, said that clients\u2019 access to banking was improved through its network of 843 Intelligent Depositors, while it also increased the total number of digitally focused new-image branches to 303.<\/p>\n
Digitally active and enabled clients grew strongly, increasing the value of Nedbank App Suite transactions by 68% to R18.6 billion.<\/p>\n