Nedbank H1 revenue up 13%

Nedbank, the fifth largest bank in South Africa, has reported a 13% increase in revenue for the first half of the year, defying the general negative trend in the market. The bank's interim results revealed an 11% growth in headline earnings per share, driven by increased lending activity and higher interest rates. Mike Brown, the CEO of Nedbank, discussed the bank's performance in an interview with CNBC Africa. Brown acknowledged the challenging economic environment, noting the impact of multiple interest rate hikes on consumers and businesses. Despite facing pressure from rising interest rates and inflation, Nedbank remains optimistic about the future. Brown emphasized the resilience of the bank's performance, highlighting a slight reduction in retail bad debts expected in the second half of the year. He expressed hope that as inflation decreases, interest rates will follow suit, providing relief to borrowing consumers. Brown also noted that net savers are benefiting from the current interest rate environment. In terms of corporate clients, Brown discussed the impact of interest rate hikes on SMEs. While SMEs have faced pressure, they have generally coped better than expected. Brown mentioned that businesses in sectors like agriculture and horticulture have experienced difficulties, exacerbated by factors like load shedding. He addressed Nedbank's exposure to sustainable finance, indicating a significant investment in renewable energy projects. On the topic of being placed on the grey list by the Financial Action Task Force, Brown reassured that the impact on Nedbank's business has been minimal so far. He emphasized the need to address the reasons for the greylisting promptly to mitigate potential consequences. Regarding developments in Nigeria under a new administration, Brown discussed the positive outlook resulting from currency liberalization and the removal of fuel subsidies. Brown also provided an update on the succession process following his announcement of stepping down as CEO. He shared that the process is progressing well, with the board overseeing the search for his successor. Brown confirmed his commitment to managing Nedbank until a suitable replacement is appointed. Looking ahead, Nedbank remains focused on navigating the economic challenges and delivering value to its customers and shareholders. The bank's strong performance in the first half of the year reflects its resilience in a volatile market environment.