(3 Minutes Read)
The Nedbank Group, one of Africa’s largest banking groups, revealed last week in Maputo that its net results increased by 11% last year. The group showed a robust financial performance in the 12 months to 31 December 2023, compared to the same period last year, as earnings before interest and tax (LAI) rose 11% to R15.7 billion.
In an “adverse” global economic climate, this growth was made possible by a solid operating performance, as operating profit before provisions increased by 15 per cent, underpinned by a 12 per cent increase in revenue, including income from associates, and prudent expense management, partially offset by a 30 per cent increase in impairments, which paled in comparison to the 57 per cent increase in this charge reported in the first half of 2023. As a result, the group’s credit loss ratio (CPR) improved from 121 basis points (bp) in the first half of 2023 to 96 bp in the second half of 2023, and therefore 109 bp for the full year.
The advantage of diversification across our portfolio of businesses was evident in very strong LAI growth from Nedbank Africa Regions (NAR), despite starting from a low base, alongside solid performances with increases in both LAI and return on equity (ROE) from Nedbank Corporate and Investment Banking, Nedbank Retail and Business Banking and Nedbank Wealth.
The highlights of the year were achieving all of the group’s post-Covid objectives for 2023, announced in March 2021. Two of these objectives were already achieved in 2022 – surpassing 2019’s core diluted earnings per share (EPS) of 2,565 cents and ranking number one in the Net Promoter Score (NPS).In 2023, the bank further increased EPS to 3,199 cents, an increase of 14 per cent year-on-year (y-o-y), and maintained the number one ranking in NPS among South African banks. Pleasingly, at the end of 2023, the bank also achieved the remaining 2 targets by reporting an ROE of 15.1 per cent, above the target level of 15.0 per cent, and a cost-income ratio of 53.9 per cent, which is below our target of 54.0 per cent.
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The Nedbank Africa Regions (NAR) business has operations in Eswatini, Lesotho, Mozambique, Namibia, and Zimbabwe, as well as representative offices in Ghana and Kenya, and also has a 21.2 per cent stake in Ecobank Transnational Incorporated (ETI), which is a leading pan-African private banking group present in thirty-five (35) sub-Saharan African countries in Francophone West Africa, Nigeria, Anglophone West Africa and Central, East and South Africa (CESA).
