Good news for Nedbank shareholders

Nedbank reported strong interim results for the six months through June 2024 and upped its dividend by 11.5%.

Nedbank released its results for the six months ended 30 June 2024 today, which revealed solid results for the company.

Its headline earnings (HE) increased by 8% to R7.9 billion compared to the previous year, and its return on equity (ROE) increased to 15.0%, up from the prior year. 

The company said its 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,” said Nedbank chief executive Jason Quinn. 

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

“We remain cautiously optimistic around 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.” 

Quinn said that while trading conditions improved noticeably as some of the most pressing structural constraints on the economy eased due to a stabilised electricity supply, progress in resolving some of the other infrastructure constraints remained limited.

“Our relatively strong financial performance in H1 2024, including the progress made in executing on our strategy and better economic prospects, give us confidence in making progress towards our medium-term targets and our aim to increase our ROE to 17% by 2025 and above 18% in the long term,” he said.

Nedbank’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.

EPS grew ahead of HE as a result of the R5 billion capital optimisation initiative that was completed in H1 2023.

The company’s balance sheet remained very strong. CET1 and tier 1 capital ratios of 13.3% and 14.7% were well above board-approved target ranges and SARB minimum requirements. 

Following this solid performance and considering its strong capital and liquidity positions, Nedbank declared an interim dividend of 971 cents per share, up by 11.5%.