The Nedbank Group has delivered an excellent financial performance for the six months ended June 30, as headline earnings (HE) increased by 27 per cent to E6.7 billion.
When unpacking the financial results through a virtual press conference yesterday, Group Managing Executive Nedbank Africa Regions (NAR) Dr Terence Sibiya explained that their impressive performance was driven by strong revenue growth, a flat credit loss ratio, an improved performance from associate Ecobank Transnational Incorporated (ETI) and a well-managed expense base.
Chief Executive Mike Brown said the group’s performance in the first half of 2022 reflected improvements across all key metrics in a complex and difficult operating environment.
“The group’s return on equity (ROE) increased to 13.6 per cent (June 2021: 11.7 per cent), and all frontline business units generated ROEs above the group’s cost of equity (COE),” Brown explained. It was mentioned that the group’s balance sheet remained strong.
“On the back of strong earnings growth and robust capital and liquidity positions, the group declared an interim dividend of 783 cents, up by 81 per cent year-on-year and back above the 2019 pre-COVID-19 interim dividend,” Brown said.
Nedbank reported that headline earnings of the NAR business increased by more than 100 per cent to E574 million from E182 million for the period, delivering an ROE of 15.9 per cent, above the group cost of equity.
It was explained that this increase was attributable to an improved performance in the Southern African Development Community (SADC) operations and a continued turnaround of the ETI associate investment.
Outside South Africa, Nedbank has operations in five countries in SADC, through subsidiaries and banks in Eswatini, Lesotho, Mozambique, Namibia and Zimbabwe, with representative offices in Kenya (Nairobi) and Ghana (Accra).
To ensure coverage and earnings at West and Central Africa, Nedbank has a 21 per cent shareholding in the ETI (also known as Ecobank Group).
“I am pleased that the NAR business delivered a good set of results driven by a great performance from our associated investment in ETI and an improved performance from the SADC operations,” said Dr Sibiya.
He mentioned that Nedbank’s SADC operations generated headline earnings of E190 million and return on equity of 6.1 per cent in the first half (H1) of 2022 from a headline loss of E11 million and return on equity of -0.4 per cent in H1 2021.
The improved performance was driven mainly by an increase in revenue in the group’s operations which include Eswatini. It was added that SADC operations gross operating income (GOI) increased by 41 per cent to E1. 9 billion.