Nedbank crushes targets 

Nedbank achieved all of its targets in the 2023 financial year and reported headline earnings growth of 11%.

Nedbank released its results for the year ended 31 December 2023 today, which revealed strong results for one of the biggest banks in South Africa.

In a difficult operating environment, Nedbank’s headline earnings increased 11% to R15.7 billion. 

This growth was enabled by a strong operational performance as pre-provisioning operating profit increased by 15%.

It was underpinned by 12% revenue growth and solid expense management and was partially offset by a 30% increase in the impairment charge.

However, this impairment charge is reduced from the 57% increase in this charge reported in H1 2023. 

As a result, the group’s credit loss ratio improved from 121 basis points in H1 2023 to 96 basis points in H2 2023 and, therefore, reached 109 basis points for the full year.

The bank’s balance sheet remained very strong in 2023, as it achieved CET1 and tier 1 capital ratios of 13.5% and  15.0% were well above board-approved target ranges and Reserve Bank minimum requirements.

Nedbank CEO Mike Brown said a highlight of the year was achieving all the group’s post-Covid targets for end-2023 that were announced in March 2021. 

“Two of these targets were already achieved in 2022 – exceeding the 2019 diluted headline earnings per share (DHEPS) of 2,565 cents and ranking #1 on Net Promoter Score (NPS).”

“In 2023, we further increased DHEPS to 3,199 cents, up by 14% year on year, and we maintained our #1 NPS ranking among South African banks.”

At the end of 2023, Nedbank also met its remaining two targets by reporting an ROE of 15.1% – the target level was 15.0% – and a cost-to-income ratio of 53.9% – lower than its target of 54.0%. 

“These targets were achieved as a result of ongoing progress on the delivery of our strategy, with a focus on growth, productivity, as well as risk and capital management,” Brown said.

“While we were pleased to have achieved all our 2023 targets while operating in a more difficult economic environment, we aspire to deliver ongoing improvements in ROE to increase shareholder value.” 

Nedbank’s medium-term targets include increasing its ROE to 17% by end-2025 and above 18% in the long term.

“As I reach the final stretch of my 30 years with the Nedbank Group, the last 14 of which I was privileged to be the CEO, I look back with pride on our achievements and the challenges we have overcome together,” Brown said. 

“When I retire as planned at the annual general meeting in May 2024 and hand over to Jason Quinn, I know I leave behind a better Nedbank than what I was entrusted with and that Jason and the Nedbank team will inherit strong foundations from which to build an even better future for all our stakeholders.”

Nedbank declared a final dividend of 1,022 cents per share, up by 18%, bringing the total dividend for 2023 to 1,893 cents per share, up by 15%.