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Results for the year ended 31 December 2023 and Cash Dividend Declaration
NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
A2X share code: NED
ISIN: ZAE000004875
JSE alpha code: NEDI
('Nedbank Group' or 'the group')
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023 AND CASH DIVIDEND DECLARATION
All 2023 targets met – a strong foundation from which we shift focus to deliver our medium-term targets
In 2023 the operating environment for South African banks was more challenging than initially forecast. In
addition to a weaker global economy, domestic economic activity was impacted by record levels of load-
shedding (electricity shortages), logistical constraints, higher-than-expected levels of inflation and, as a result,
higher-than-expected increases in interest rates. Collectively these conditions have put increasing pressure on
consumers' finances and led to reductions in business confidence and investment in most sectors other than
energy. Progress, albeit slow, is being made in the partnership between government and business to help
address the key issues of energy security, transport and logistics, and crime and corruption that are collectively
resulting in very low levels of economic growth in South Africa (SA) and a weakening fiscal position.
Despite this difficult and volatile operating environment, Nedbank Group produced a strong financial
performance in 2023. Headline earnings (HE) grew by 11% to R15,7bn, underpinned by strong revenue and
associate income growth of 12% and prudent expense management that enabled preprovisioning operating
profit (PPOP) growth of 15%. This growth was partially offset by a 30% increase in the impairment charge, which
reduced from the 57% increase reported in H1 2023. As a result, the group's credit loss ratio (CLR) improved
from 121 bps (H1 2023) to 109 bps for the full year. The diversification benefit across our portfolio of businesses
was evident in very strong growth in HE from Nedbank Africa Regions, albeit off a low base, alongside solid
performances in both HE and return on equity (ROE) from Nedbank Corporate and Investment Banking, Nedbank
Retail and Business Banking and Nedbank Wealth. The group's balance sheet metrics all remained strong,
enabling the declaration of a final dividend of 1 022 cents per share, up by 18%, at a payout ratio of 57%. The
R5bn capital optimisation initiative announced in March 2023 was completed successfully, through a share
repurchase programme and odd-lot offer executed at attractive levels, enhancing both ROE and earnings growth
on a per-share basis.
A highlight of the year was achieving all the group's post-Covid targets for 2023 announced in March 2021. Two
of these targets were already achieved in 2022 – being 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 14% yoy, and we maintained our #1 NPS ranking among South African banks. Pleasingly, at the
end of 2023, we also met the remaining 2 targets, being reporting an ROE of 15,1% ahead of the target level of
15,0% and a cost-to-income ratio of 53,9%, which is lower than our target of 54,0%.
These targets were achieved as a result of ongoing progress on delivery of our strategy, with a focus on growth,
productivity, as well as risk and capital management. Growth trends across average interest-earning banking
assets (AIEBA) (+7%), net interest income (NII) (+14%), non-interest revenue (NIR) (+6%) and associate income
(+64%) remained robust. Levels of productivity improved, evident in our cost-to-income ratio declining to 53,9%
from 55,8% in 2022. Capital and liquidity ratios remained strong, with a common equity tier 1 (CET1) ratio of
13,5%, an average fourth-quarter liquidity coverage ratio (LCR) of 135% and a net stable funding ratio (NSFR) of
117%, all well-above board targets and regulatory minimums. The group's total expected credit loss (ECL)
coverage increased to an annual high of 3,62% (Dec 2022: 3,37%) and we remain conservatively provided in a
difficult macroeconomic environment.
Our world-class technology platform, delivered through our Managed Evolution (ME) programme that has
reached 95% completion, supported continued double-digit growth in all digital-related metrics; client
satisfaction scores remaining at the top-end of the South African banking peer group; higher levels of cross-sell;
main-banked client gains across all segments; market share gains in key product categories; and improved
efficiencies. We continued to create positive impacts through R145bn of exposures that support sustainable
development finance (SDF) aligned with the United Nations (UN) Sustainable Development Goals (SDGs);
maintained high levels of employee satisfaction; supported clients during difficult times; retained our top-tier
rankings on environmental, social and governance (ESG) scores; and maintained our level 1 broad-based black
economic empowerment (BBBEE) status under the Amended Financial Sector Code (FSC) for the sixth year in a
row.
Looking forward, although geopolitical uncertainties increase forecast risk, we currently expect the economic
environment in SA to remain challenging but improve off a low 2023 base. The Nedbank Group Economic Unit
forecasts SA's gross domestic product (GDP) to increase by 1% in 2024 and inflation to continue to reduce. The
forecast for the South African prime lending rate is to decline by a cumulative 75 bps in the second half of 2024
to end the year at 11,0% and private sector credit growth to be muted at around 5%.
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. Our strong
financial performance in 2023, together with the progress made in executing on our strategy and underlying
momentum in the business, gives us confidence in delivering on our medium-term targets* and, in particular,
our aim to increase our ROE to 17% by 2025 and above 18% in the long term.
As I reach the final stretch of my 14 years as Chief Executive of Nedbank Group, I look back with pride on our
achievements and the challenges we have overcome together. When I retire 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.
Thank you to all the Nedbankers who have been part of this journey and to our more than 7,3 million retail and
wholesale clients for choosing to bank with Nedbank. We also appreciate the ongoing support of the investment
community, regulators, and our other stakeholders. As Nedbank, we continue to play a constructive and positive
role in society as we fulfil our purpose of using our financial expertise to do good for the benefit of all our
stakeholders.
Mike Brown
Chief Executive
* These targets are not profit forecasts and have not been reviewed or reported on by the group's joint auditors.
FINANCIAL HIGHLIGHTS
- Headline earnings of R15 650m, up by 11% (2022: R14 061m)
- Revenue of R69 179m, up by 11% (2022: R62 448m)
- Credit loss ratio of 109 bps (2022: 89 bps)
- Expenses of R38 059 m, up by 8% (2022: R35 329m)
- Cost-to-income ratio of 53,9% (2022: 55,8%)
- Diluted headline earnings per share of 3 199 cents, up by 14% (2022: 2 809 cents)
- Headline earnings per share of 3 312 cents, up by 15% (2022: 2 888 cents)
- Basic earnings per share of 3 239 cents, up by 10% (2022: 2 934 cents)
- Final dividend per share of 1 022 cents, up by 18% (2022: 866 cents)
- Full year dividend per share of 1 893 cents, 15% up on the prior year (2022: 1 649 cents)
- Net asset value per share of 23 192 cents, up by 8% (2022: 21 533 cents)
- Common-equity tier 1 ratio of 13,5% (2022: 14,0%)
The information contained in this short-form announcement is based on the audited annual financial statements
(AFS) for the year ended 31 December 2023 but is itself not audited. This short-form announcement is the
responsibility of the directors. It is only a summary of the information contained in the AFS and does not contain
full or complete details. Any investment decision should be based on the AFS, which can be accessed from
Tuesday, 5 March 2024, on the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2024/jse/isse/ned/ye2023.pdf
Alternatively, the AFS are available on our website at:
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/investor-relations/information-hub/financial-
results/2023.html
Copies thereof may be requested free of charge from Nedbank Investor Relations at
nedgroupir@nedbank.co.za.
The joint auditors, Deloitte & Touche and Ernst & Young Inc, have issued an unmodified report (including key
audit matters) to the shareholders of Nedbank Group, which forms part of the AFS.
FINAL DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 1 022 cents per ordinary share has been declared, payable to
shareholders for the year ended 31 December 2023. 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 204,4 cents per
ordinary share, resulting in a net dividend of 817,6 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-taxation 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 was 488 105 724.
In line with the provisions of Strate, the electronic settlement and custody system used by the JSE Limited, the
relevant dates for the dividend are as follows:
2024
Last day to trade (cum dividend) Tuesday, 9 April
Shares commence trading (ex dividend) Wednesday, 10 April
Record date (date shareholders recorded in shareholders' register) Friday, 12 April
Payment date Monday, 15 April
Share certificates may not be dematerialised or rematerialised between Wednesday, 10 April 2024, and Friday,
12 April 2024, both days inclusive.
Where applicable, dividends in respect of certificated shares will be transferred electronically to shareholders'
bank accounts on the payment date. In the absence of specific mandates, the dividend will be withheld until
shareholders provide their banking information. Holders of dematerialised shares will have their accounts
credited at their participant or broker on Monday, 15 April 2024.
For and on behalf of the board
Daniel Mminele Mike Brown
Chairperson Chief Executive
5 March 2024
Directors
AD Mminele (Chairperson), MWT Brown** (Chief Executive), HR Brody*, BA Dames, MH Davis** (Chief Financial
Officer), NP Dongwana, EM Kruger, P Langeni, RAG Leith, L Makalima, MC Nkuhlu** (Chief Operating Officer),
TM Nombembe, S Subramoney.
* Lead Independent Director ** Executive
Registered office
Nedbank Group Limited, Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, Sandton, 2196
PO Box 1144, Johannesburg, 2000
nedbankgroup.co.za
Sponsors in SA
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Merrill Lynch SA Proprietary Limited t/a BofA Securities
Sponsor in Namibia
Old Mutual Investment Services (Namibia) (Proprietary) Limited
Company Secretary: J Katzin
Transfer secretaries in SA
JSE Investor Services Proprietary Limited, One Exchange Square, Gwen Lane, Sandown, Sandton, 2196
PO Box 4844, Johannesburg, 2000
Transfer secretaries in Namibia
Transfer Secretaries (Proprietary) Limited, 4 Robert Mugabe Avenue, Windhoek, Namibia
PO Box 2401, Windhoek, Namibia
Date: 05-03-2024 07:05:00
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