• Headline earnings up 27%

  • Capital and liquidity ratios continued to strengthen

  • Group’s interim dividend increased by 81%

Nedbank has recorded a 27% increase in headline earnings to R6.7 billion for the six months ended 30 June 2022 driven by strong revenue growth, a credit loss ratio that was flat year on year at 85 basis points and good cost management.

Revenue for the period under review increased by 11% to R30.5 billion.

The Group’s capital and liquidity ratios continued to strengthen as reflected in the common equity tier 1 ratio which grew to 13.5%, from 12.8% in December 2021, and tier 1 capital ratio of 15.1% compared to 14.3% recorded in December 2021, the average second-quarter liquidity coverage ratio of 144% and a net stable funding ratio of 120% up from 116% in December 2021.

“These capital and liquidity outcomes support a strong interim dividend of 783 cents per share, which is up 81% and is now at levels above the 2019 pre-Covid-19 interim dividend,” Chief Executive Officer, Mark Brown said in a statement accompanying the Group’s financial results.

Nedbank’s return on equity (ROE) increased to 13.6% from 11.7% in June 2021 and all business clusters generated ROEs above the cost of equity (COE).

“The Group ROE was diluted by an average of R11 billion of surplus tier 1 capital held at the centre as we remain appropriately conservative in an uncertain external environment. We retain surplus capital primarily for higher levels of future growth and dividend payments,” Brown said.

During the six months, growth trends across net interest income non-interest revenue and gross advances improved from the Covid-19 pandemic lows, supported by main-banked client gains across business clusters and strong growth in digital activity.

Brown said the Group's financial performance in the first half of 2022 reflected an excellent performance across all key metrics in a complex and difficult external environment.

“During the past six months, Nedbank continued to make good progress on its strategic value drivers of growth, productivity and risk and capital management," he said.

Equity Axis News