NEDBANK
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NEDBANK GROUP
A Tale of
Growth & Innovation PRODUCTION: William Denstone
Nedbank Group stands among South Africa’s four largest banks while continuing to expand into the rest of Africa, owning subsidiaries and banks in Namibia, Swaziland, Malawi, Mozambique, Lesotho, Zimbabwe, as well as representative offices in Angola and Kenya.
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INDUSTRY FOCUS: FINANCE
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Nedbank specialises in a wide range of wholesale and retail banking services which combine with a growing insurance, asset management and wealth management offering. Its history can be traced back to the early 19th century with the establishment of the Cape of Good Hope Bank in 1831. Following successive branding and structural changes, Nedbank Group was formed in 2003, since which time Nedbank has implemented a fleet of innovations, and been named Bank of the Year in both 2013 and 2014 by Financial Times’s The Banker magazine. GLOBAL COMPETITION Today, Nedbank benefits from strategic alliances across the globe, and has gained a reputation as one of
// WE WANT TO LEVERAGE THE STRENGTH THAT NEDBANK HAS IN SOUTH AFRICA OVER OTHER AFRICAN COUNTRIES // the most heavily transformed banks in South Africa. Nedbank Zimbabwe is one of the focal points for the Group in expanding its global reach, and represents a rebranding of Merchant Bank of Central Africa Limited (MBCA), the oldest of its kind in the country following its incorporation
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in 1956. Access to the cutting edge of global capital markets through its shareholder network alongside numerous correspondent bank relationships in all financial centres worldwide affords technical expertise and sources of competitive finance on a worldwide scale. According to Managing Director Charity Jinya, the changeover will be performed with a focus on adaptability to the changing needs of the market, in order to give the new entity the edge over the staunch domestic competition. Maintaining this approach has been central to securing the pan-African success to date of its South-African headquartered major shareholder, NedGroup Investments Africa, as it mounts this challenge on Zimbabwe’s banking landscape. “We are looking into the future where we have more agility and where we are more responsive to the needs of our clients; we want to be competitive,” Jinya explained. “We want to leverage the strength that Nedbank has in South Africa over other African countries. “The objective is to grow the business to ensure that we move into the top tier of banks. Nedbank is going international,” Jinya detailed. ROBOTS TO RULE? In tune with Nedbank’s policy of being at the forefront of changing consumer demands, it has this month pledged up to R2 billion on technology investments, in the form of highly advanced software robots. While the excitement of the innovation might be tempered by fears of cutting staff numbers, the potential replacement of some 3000 employees would in fact take place through natural attrition and offset through the bank’s expected growth, rather than through redundancy, Nedbank Chief Information Officer Fred Swanepoel explained. “When we look at the expected
NEDBANK
// OUR HEADLINE EARNINGS OF R11.8BN REFLECTS A GOOD PERFORMANCE FROM OUR MANAGED OPERATIONS, UNDERPINNED BY TIGHT COST MANAGEMENT AND A HIGH-QUALITY ADVANCES BOOK // implementations and the natural attrition we are going to suffer,” he said, “we think that there is more than adequate room for us not to have any mass retrenchments on account of robotics. We are looking to have some of that displacement offset in the growth we will receive. With about 32,000 staff, our natural
attrition rate is about 3000 per year. When we look at a three-year period, we don’t think that robotics will take up more than one year of that natural attrition.” STRONG RESULTS IN A TOUGH CLIMATE When Nedbank announced its financial results for 2017, it would have been difficult to predict headline earnings growing by 2.8%, given what the bank describes as a very difficult operating environment, characterised by weak economic growth and heightened political and policy uncertainty. This delivered a marked improvement on the 2.9% reduction in headline earnings which Nedbank reported in the first half of 2017. Further to this, headline earnings from managed operations, which include all operations except Nedbank’s approximate 20% share in associate Ecobank Transnational Incorporated (ETI), grew by 7.8%. Net asset value grew by 7.3%, dividends were up 7.1%, and return on equity
remained steady at 16.4%. This, said Nedbank Group CEO Mike Brown, showed the bank’s resilience in a tough economic environment. “Our headline earnings of R11.8bn reflects a good performance from our managed operations, underpinned by tight cost management and a highquality advances book,” said Brown, who also added his optimism for the 2018 outlook. “While during 2017 consumer and business confidence had slumped to the lowest levels in many years, contributing to a slowdown in lending and transactional activities, particularly in our corporate and investment and wealth businesses, there was a marked change in confidence after the election of Cyril Ramaphosa as ANC President and, subsequently, as president of SA,” Brown concluded.
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April 2018
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EXCLUSIVE INTERVIEW WITH OASIS WATER MANAGING DIRECTOR, MYNHARDT OOSTHUIZEN
Taking Finest Quality Purified And Oxygenated Water
Where It Is Needed Most
ALSO IN THIS ISSUE:
Rolfe Laboratories / Wonga SA / NFB Financial Services / RussellStone Group
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APR IL 2018