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Unaudited Condensed Consolidated Interim Results for the 6 months ended 30 June 2024 and Cash Dividend Declaration
NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
A2X share code: NED
ISIN: ZAE000004875
JSE alpha code: NEDI
(Nedbank Group or the group)
Unaudited Condensed Consolidated Interim Financial Results for the 6 onths
ended 30 June 2024 and Cash Dividend Declaration
FINANCIAL HIGHLIGHTS
- Headline earnings of R7 911m, up by 8% (June 2023: R7 329m)
- Revenue of R35 159m, up by 4% (June 2023: R33 691m)
- Credit loss ratio of 104 bps (June 2023: 121 bps)
- Total operating expenses of R19 775m, up by 8% (June 2023: R18 229m)
- Cost-to-income ratio of 55,3% (June 2023: 52,9%)
- Diluted headline earnings per share of 1 650 cents, up by 12%
(June 2023: 1 477 cents)
- Headline earnings per share of 1 699 cents, up by 11% (June 2023: 1 525
cents)
- Basic earnings per share of 1 700 cents, up by 12% (June 2023: 1 524
cents)
- Interim dividend declared of 971 cents per share (June 2023: 871 cents)
- Net asset value per share of 23 097 cents, up by 2% (June 2023:
22 548 cents)
- Common-equity tier 1 ratio of 13,3% (June 2023: 13,3%)
Strong financial performance in a difficult macroeconomic environment
The operating environment during the first 6 months of 2024 was challenging
and economic activity remained weak, impacted by geopolitical uncertainty,
high interest rates, persistent inflation and general uncertainty ahead of
the national elections in South Africa (SA). Household finances remained
under pressure as real incomes contracted and job prospects remained muted.
Corporate activity was also weak on the back of the uncertain political and
economic environment. The financial implications of these difficult
macroeconomic outcomes were evident in continued elevated levels of consumer
strain and slow lending and transactional revenue growth across both
wholesale and retail clients. A peaceful and fair election outcome and the
swift formation of a government of national unity (GNU) spurred cautious
optimism in financial markets resulting in lower bond yields, stronger equity
markets and a stronger rand. Spreads on credit default swaps improved
markedly, trending towards levels seen when the country's sovereign credit
ratings were at investment grade.
Against this backdrop, Nedbank Group produced a relatively strong financial
performance. Headline earnings (HE) increased by 8% yoy to R7,9bn,
underpinned by good non-interest revenue growth, a lower impairment charge
and tight cost control. The group's return on equity (ROE) improved to 15,0%
from 14,2% in the prior period. Diluted headline earnings per share (HEPS)
increased by 12%, benefitting from the R5bn capital optimisation programme.
Balance sheet metrics all remained very strong, enabling the declaration of
an interim dividend of 971 cents per share, up by 11,5%, at a payout ratio
of 57%.
Our world-class technology platform, delivered through the Managed Evolution
(ME) programme, has now reached 95% completion. This has supported ongoing
strong growth in digital-related metrics; client satisfaction scores at the
top end of the South African banking peer group; good main-banked client
growth; higher levels of cross-sell; market share gains in areas that create
most value, including retail deposits, home loans, vehicle finance and
overdrafts; and efficiency gains as we delivered on our Target Operating
Model (TOM) 2.0 target of R2,5bn. We have also continued to create wider
positive impacts through R154bn of funding that supports sustainable
development finance, aligned with the United Nations Sustainable Development
Goals. In particular we are proud of growing renewable energy finance by 20%
ytd; retaining our top-tier rankings on environmental, social and governance
(ESG) scores; and maintaining our level 1 broad-based black economic
empowerment status for the sixth year in a row.
We remain cautiously optimistic around the potential benefits associated with
SA's GNU and expect better macroeconomic conditions in the second half of
2024 and into the medium-to-long term. We forecast SA's gross domestic
product to increase by 0,9% in 2024, inflation to continue to decline and
the South African prime lending rate to decline by a cumulative 50 bps in
2024 to end the year at 11,25%. On the back of an improving operating
environment, we continue to aspire to deliver ongoing improvements in ROE to
increase shareholder value. Our strong financial performance in H1 2024,
together with the progress made in executing on our strategy and better
economic prospects, give us confidence in making progress towards our medium-
term targets* and, in particular, our aim to increase our ROE to 17% by 2025
and above 18% in the long term.
The seamless transition from Mike Brown to myself was well planned and
executed. I am aligned with the board and the leadership teams, which has
enabled us to continue running our business very smoothly. Improving
performance is a key priority and I have adopted Nedbank's medium-term
performance targets as my own. I am extremely comfortable with the strong
foundations that Nedbank has built, including capital and liquidity levels
and an improving financial performance, as well as the group's strong and
vibrant culture, its focus on transformation (diversity, equity and
inclusion), leading ESG credentials and significant investments in
technology. We will continue to build on these strong foundations as we
evolve and continuously refresh our strategy in response to an everchanging
operating environment.
I extend my gratitude to all Nedbankers who have made me feel welcome as
part of the organisation and contributed to our successes in the first half
of the year. Thank you to our 7,5 million retail and wholesale clients who
have entrusted Nedbank with serving their financial needs. My appreciation
also goes out to the investment community, regulators and other stakeholders
for their continued support. Nedbank remains strongly committed to making a
meaningful and positive impact in society, using our financial expertise to
do good for all stakeholders.
Jason Quinn
Chief Executive
* These targets are not profit forecasts and have not been reviewed or
reported on by the group's joint auditors.
This short-form announcement is the responsibility of the directors.
Investment decisions should be based on consideration of the full unaudited
condensed consolidated interim financial results for the 6 months ended
30 June 2024, as this announcement does not contain full or complete details.
The complete interim financial results are available on the JSE cloudlink
at https://senspdf.jse.co.za/documents/2024/jse/isse/NED/ie2024.pdf
and on our website at
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/investor-
relations/information-hub/financial-results/2024.html
INTERIM DIVIDEND DECLARATION
Notice is given that an interim dividend of 971 cents per ordinary share has
been declared, payable to shareholders for the 6 months ended 30 June 2024.
The dividend has been declared from income reserves.
The dividend will be subject to a dividend withholding tax rate of 20%
(applicable in SA) or 194,2 cents per ordinary share, resulting in a net
dividend of 776,8 cents per ordinary share, unless the shareholder is exempt
from paying dividend tax or is entitled to a reduced rate in terms of an
applicable double-taxation agreement.
Nedbank Group's tax reference number is 9375/082/71/7 and the number of
ordinary shares in issue at the date of declaration was 488 020 500.
In line with the provisions of Strate, the electronic settlement and custody
system used by JSE Limited, the relevant dates for the dividend are as
follows: Event Date
Event Date
Last day to trade (cum dividend) Tuesday, 3 September 2024
Shares commence trading (ex dividend) Wednesday, 4 September 2024
Record date (date shareholders recorded Friday, 6 September 2024
in books)
Payment date Monday, 9 September 2024
Share certificates may not be dematerialised or rematerialised between
Wednesday, 4 September 2024, and Friday, 6 September 2024, both days
inclusive.
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders' bank accounts on the payment
date. In the absence of specific mandates, the dividend will be withheld
until shareholders provide their banking information. Holders of
dematerialised shares will have their accounts credited at their participant
or broker on Monday, 9 September 2024.
For and on behalf of the board
Daniel Mminele Jason Quinn
Chairperson Chief Executive
6 August 2024
Directors
AD Mminele (Chairperson), JP Quinn** (Chief Executive), HR Brody*, BA Dames,
MH Davis** (Chief Financial Officer), NP Dongwana, MA Hermanus, EM Kruger,
P Langeni, RAG Leith, L Makalima, MC Nkuhlu** (Chief Operating Officer), TM
Nombembe, S Subramoney.
* Lead Independent Director ** Executive
Registered office
Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, Sandton, 2196
PO Box 1144, Johannesburg, 2000
nedbankgroup.co.za
Sponsors in SA
Merrill Lynch South Africa (Pty) Limited, t/a BofA Securities
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Sponsor in Namibia
Old Mutual Investment Services (Namibia) (Proprietary) Limited
Group Company Secretary: J Katzin
Transfer secretaries in SA
JSE Investor Services Proprietary Limited, One Exchange Square, Gwen Lane,
Sandown, Sandton, 2196
PO Box 4844, Johannesburg, 2000, SA
Transfer secretaries in Namibia
Transfer Secretaries Proprietary Limited, 4 Robert Mugabe Avenue, Windhoek,
Namibia
PO Box 2401, Windhoek, Namibia
Date: 06-08-2024 07:05:00
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