Nedbank Group delivered a strong financial performance for the six months to 30 June 2024, amid a challenging operating environment, as Headline Earnings (HE) increased by 8% year to year to N$7.9 billion. 

Return on equity (ROE) increased to 15% from 14.2% in the first half of 2023. The increase in HE was underpinned by good non-interest revenue (NIR) growth, a lower impairment charge and targeted expense management, partially offset by muted net interest income (NII) growth, and lower associate income.

The operating environment
in the first half of 2024 was challenging, as economic activity remained weak, Terence Sibiya, Group Managing Executive, Nedbank Africa Regions, said. 

“In addition to geopolitical uncertainty, persistent inflation, high interest rates and uncertainty ahead of the national elections in South Africa (SA) impacted domestic activity negatively,” he said.

He added: “We remain cautiously optimistic about the potential benefits associated with South Africa’s Government of National Unity, and expect better macroeconomic conditions in the second half of 2024, and into the medium-to-long term. While trading conditions improved noticeably as some of the most pressing structural constraints on the economy eased because of stabilised electricity supply, progress in resolving some of the other infrastructure constraints remained limited”.

Sibiya added the relatively strong financial performance in the first half of 2024, including the progress made in executing the strategy and better economic prospects, give them confidence in making progress towards the medium-term targets, and Nedbank’s aim to increase the ROE to 17% by 2025 and above 18% in the long –
term.

The group’s headline earnings per share (HEPS) increased by 11% to 1 699 cents, diluted HEPS (DHEPS) increased by 12% to
1 650 cents, and basic earnings per share (EPS) increased by 12% to
1 700 cents, ahead of the HE
growth of 8%, because of the N$5 billion capital optimisation initiative that was materially completed in the first half of 2023.

The group’s balance-sheet remained very strong. Following a solid performance and strong capital and liquidity positions, the group declared an interim dividend of 971 cents per share, up by 11.5% (June 2023: 871 cents per share) at a payout ratio of 57%.