Nedbank profit soars

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NEDBANK Zimbabwe (Nedbank) says its inflation-adjusted profit for the year ended December 31, 2022 rose 311 percent to $12,77 billion from $3,1 billion in the comparative period on the back of increased funded and non-funded income.
Unrealised foreign exchange gains contributed 70 percent of the increase in non-funded income, which rose by 205 percent.
In a statement accompanying the results, managing director Sibongile Moyo said this is consistent with the bank’s goal for value preservation.
“The non-funded income increase was spurred by increased volume of transactions as well as an increase in active customer numbers on our mobile banking and internet banking platform,” she said.

Funded income surged by 46 percent during the period under review.
Net interest income increased by 39 percent to $6,78 billion from $4,65 billion in the comparative period.
“The contribution of net interest income increased to 32 percent of total income from core banking activities due to increased lending to the private sector and investment in government securities and foreign placements.”
Cost to income ratio improved to 37 percent from 57 percent in inflation-adjusted terms over prior year.
“Operating costs excluding net monetary loss and net impairment losses increased by 74 percent, mainly due to increase in business volumes and employee compensation in line with economic pressures,” she said.
Non-performing loans (NPL) were well managed with an NPL of 0,52 percent.
“Lending to the private sector increased by 101 percent mainly due to increased lending in foreign currency in line with client needs. The bank’s credit loss ratio and non-performing loans were well maintained at 3,86 percent and 0,52 percent respectively.”
Capital adequacy ratio increased to 40 percent from 29 percent in the prior year. It was well above the prudential guidelines of 12 percent.
The balance sheet grew by 53 percent to $128,7 billion largely due to the increase in deposits from customers, retained earnings and shareholder funds arising from the rights issue concluded in February 2022.
Nedbank achieved a sound liquidity position, with a liquidity ratio of 103 percent above the 30 percent regulatory minimum.
Regulatory core capital of US$34,2 million was well above the regulatory Minimum Capital Requirement of US$30 million.
In the period, the bank achieved 73 percent digitally active clients and downloads of its mobile banking App more than doubled.
Return on equity (ROE) was well ahead of cost to equity at 67 percent, exceeding prior year ROE of 33 percent.
Nedbank has a cautiously positive outlook for the economy given its trajectory and recent policy changes.
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