Nedbank trading update shows continued focus on delivering ambitious growth targets
23 June 2021
Nedbank Group announced today that it continues to focus on delivering on its ambitious growth targets and there would be no changes for clients and staff following the announcement by Old Mutual that it would unbundle a portion of its minority shareholding in Nedbank, subject to the requisite regulatory approvals.
The transaction would result in a number of benefits for Nedbank Group and its stakeholders, including shareholders, Nedbank CE Mike Brown says. “The increased free-float of Nedbank Group share would place the bank in a more favourable position on relevant indices,” Brown added.
Nedbank remains well-capitalised and reported strong capital and liquidity ratios in its Pillar 3 disclosures at 31 March 2021. “We continue to focus on executing on our strategy and delivering on the ambitious medium-term targets we have set ourselves,” Brown says.In a trading update released for the five months to 31 May 2021, Nedbank recorded a material reduction in the impairment charge compared to the five months to 31 May 2020, resulting in headline earnings to May 2021 that are materially higher than the R2 114m headline earnings reported for the full six months to 30 June 2020. Nedbank now expects headline earnings per share (HEPS) and basic earnings per share (EPS) for the six-month period ending 30 June 2021 to increase by more than 100% (HEPS greater than 876 cents and basic EPS greater than 540 cents) when compared with those in the six-month period to 30 June 2020 (HEPS: 438 cents and basic EPS: 270 cents).
The Group plans to resume dividend payments when reporting interim results in 2021, with the pay-out ratio still to be determined by the board.
Following conclusion of Old Mutual’s managed separation process in 2018, Old Mutual retained a 19,4% strategic minority shareholding in Nedbank Group. Nedbank’s business is independent and not integrated into Old Mutual. Old Mutual said it would reduce its shareholding through an unbundling (12,2%) to Old Mutual shareholders and would retain a 7,2% shareholding. The reduction in Old Mutual’s minority shareholding will not have an effect on Nedbank’s strategy, day-to-day management and operations, staff, clients, or its financial performance and prospects.
