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NEDBANK GROUP LIMITED - Unaudited Interim Results for the six months ended 30 June 2019 - Short Form

Release Date: 06/08/2019 07:05
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Unaudited Interim Results for the six months ended 30 June 2019 - Short Form

NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
JSE alpha code: NEDI
('Nedbank Group' or 'the group')

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

Good strategic and operational progress and a resilient financial
performance in a difficult environment

The SA economy performed worse than expected in the first six months of
2019 and our forecast for SA GDP growth for 2019 has been revised down from
1,3% to 0,5%. Significantly more urgency is required with the
implementation of structural reforms to stem the economic and fiscal
deterioration currently being experienced in the SA economy. If we are
unable to do this, all the hard work done on maintaining our last
investment grade rating from Moody’s will be in vain, at great cost to all
South Africans as a result of higher inflation and higher interest rates,
as well as lower growth and lower levels of employment than would otherwise
have been the case.

The group’s financial performance was resilient as headline earnings
increased 2,6% to R6,9bn and we produced an ROE (excluding goodwill) of
17,9%. Revenue growth was ahead of cost growth, resulting in
preprovisioning operating-profit growth of 7,0% and the cost-to-income
ratio improving to 55,4%. As expected, impairments increased off the low
prior-year base and the CLR to within the bottom half of our through-the-
cycle target range. We maintained a strong balance sheet with a CET1 ratio
of 11,3% and a strong liquidity profile. The interim dividend per share
increased by 3,6% to 720 cents per share.

A key milestone in our Managed Evolution digital journey, to position
Nedbank as a market-leading digital bank, was reached in June 2019 as we
operationalised a new and materially faster digital onboarding capability
for individual clients in all our branches, alongside the ability to sell
both a current account and personal loan digitally. Initial client feedback
has been excellent, and we remain hard at work to deliver a similar
capability for juristic client onboarding as well as the first release of
an exciting new loyalty and rewards programme in the second half of 2019.
We continued to grow main-banked clients across all our business clusters,
underpinning solid NIR growth.

In support of our purpose of using our financial expertise to do good, we
continue to play a leading role in contributing to society and the
environment. We enabled more than 3 300 new job opportunities for
previously unemployed youth as we activated our commitment to invest 1,5%
of our SA net profit after tax in the Youth Employment Service (YES)
initiative, we achieved level 1 BBBEE contributor status under the new
Amended Financial Sector Code and we became SA’s first commercial bank to
launch a green bond on the JSE.

In the context of slower-than-expected SA GDP growth we have slightly
revised our guidance for growth in diluted headline earnings per share for
2019 to around nominal GDP growth (from previously greater than or equal to
nominal GDP growth).

Mike Brown
Chief Executive


FINANCIAL HIGHLIGHTS

   -   Headline earnings R6 870m, up 2,6% (June 2018: R6 696m)
   -   Revenue R27 693m, up 5,5% (June 2018: R26 242m)
   -   Credit loss ratio 70 bps (June 2018: 53 bps)
   -   Expenses R15 565m, up 5,5% (June 2018: R14 756m)
   -   Cost-to-income ratio 55,4% (June 2018: 55,8%)
   -   Diluted headline earnings per share 1 411 cents, up 3,7% (June 2018:
       1 361 cents)
   -   Headline earnings per share 1 435 cents, up 3,5% (June 2018: 1 387
       cents)
   -   Basic earnings per share 1 419 cents, up 2,9% (June 2018: 1 379
       cents)
   -   Interim dividend per share 720 cents, up 3,6% (June 2018: 695 cents)
   -   Net asset value per share 17 794 cents, up 4,9%(June 2018: 16 956
       cents)
   -   Common-equity tier 1 ratio 11,3% (June 2018: 12,4%)

This short-form announcement is the responsibility of the directors. It is
only a summary of the information contained in the full announcement and
does not contain full or complete details. Any investment decision should
be based on the full announcement, which can be accessed from Tuesday, 6
August 2019, using the following JSE link:
https://senspdf.jse.co.za/documents/2019/jse/isse/ned/HY19result.pdf.
Alternatively, the full announcement is available on our website at
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/investor-
relations/information-hub/financial-results/2019.html.

The full announcement is available for inspection at Nedbank Group's
registered office on weekdays from 09:00 to 16:00, and copies thereof may
be requested free of charge from Nedbank Investor Relations at
NedgroupIR@Nedbank.co.za.

INTERIM DIVIDEND DECLARATION

Notice is hereby given that an interim dividend of 720 cents per ordinary
share has been declared, payable to shareholders for the six months ended
30 June 2019. The dividend has been declared out of income reserves.

The dividend will be subject to a dividend withholding tax rate of 20%
(applicable in SA) or 144 cents per ordinary share, resulting in a net
dividend of 576 cents per ordinary share, unless the shareholder is exempt
from paying dividend tax or is entitled to a reduced rate in terms of an
applicable double-tax agreement.

Nedbank Group's tax reference number is 9375/082/71/7 and the number of
ordinary shares in issue at the date of declaration is 497 053 536.

In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE, the relevant dates for the dividend are as
follows:

Event                                      Date
Last day to trade (cum dividend)           Tuesday, 10 September 2019
Shares commence trading (ex dividend)      Wednesday, 11 September 2019
Record date (date shareholders recorded    Friday, 13 September 2019
in books)
Payment date                               Monday, 16 September 2019

Share certificates may not be dematerialised or rematerialised between
Wednesday, 11 September 2019, and Friday, 13 September 2019, both days
inclusive.

On Monday, 16 September 2019, the dividend will be transferred
electronically to the bank accounts of shareholders. Holders of
dematerialised shares will have their accounts credited at their
participant or broker on Monday, 16 September 2019.

The above dates are subject to change. Any changes will be published on
SENS and in the press.

For and on behalf of the board

Vassi Naidoo                                 Mike Brown
Chairman                                     Chief Executive

6 August 2019

Directors
V Naidoo (Chairman), MWT Brown** (Chief Executive), HR Brody, BA Dames, NP
Dongwana, EM Kruger, RAG Leith, L Makalima, PM Makwana***, Prof T Marwala,
Dr MA Matooane, RK Morathi** (Chief Financial Officer), MP Moyo,
JK Netshitenzhe, MC Nkuhlu** (Chief Operating Officer), S Subramoney.
** Executive *** Lead independent director

Registered office
Nedbank Group Limited, Nedbank 135 Rivonia Campus, 135 Rivonia Road,
Sandown, Sandton, 2196.
PO Box 1144, Johannesburg, 2000.

www.nedbankgroup.co.za


Sponsors in SA
Merrill Lynch SA Proprietary Limited, Nedbank CIB

Sponsor in Namibia
Old Mutual Investment Services (Namibia) (Proprietary) Limited

Company Secretary: J Katzin

Transfer secretaries in SA
Link Market Services South Africa Proprietary Limited, 19 Ameshoff Street,
Braamfontein, Johannesburg, 2001, SA.
PO Box 4844, Marshalltown, 2000, SA.

Transfer secretaries in Namibia
Transfer Secretaries (Proprietary) Limited, Robert Mugabe Avenue No 4,
Windhoek, Namibia.
PO Box 2401, Windhoek, Namibia.

Date: 06/08/2019 07:05:00
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