Jason Quinn, the newly appointed CEO of Nedbank Group, expressed cautious optimism about South Africa’s economic prospects in the latter half of 2024 and beyond, driven by the emergence of a Government of National Unity (GNU). In his first results briefing as CEO, Quinn highlighted that Nedbank is positioned to benefit from these improving economic conditions.

Quinn anticipates a 0.9% growth in South Africa’s gross domestic product (GDP) in 2024, alongside declining inflation and a cumulative 50 basis points reduction in the prime lending rate, which is expected to end the year at 11.25%. He emphasized that the improving economic environment would support Nedbank’s goal of enhancing return on equity (ROE) to increase shareholder value.

Nedbank aims to achieve a ROE of 17% by 2025, with long-term aspirations to exceed 18%. Quinn noted that the smooth transition from former CEO Mike Brown to himself has ensured continuity in leadership, enabling the bank to pursue its medium-term performance targets effectively.

Despite a challenging macroeconomic environment, Nedbank reported strong financial results for the first half of 2024, including double-digit growth in both interim dividends and headline earnings per share (Heps). Revenue growth was modest at 4%, reaching over R35.1 billion.

Quinn acknowledged the tough operating environment, marked by geopolitical uncertainty, high interest rates, and weak economic activity. However, Nedbank’s performance was bolstered by strong non-interest revenue growth, lower impairment charges, and stringent cost controls. The group’s ROE improved to 15% from 14.2% in the previous period, with diluted Heps increasing by 12%, supported by a R5 billion capital optimization program. Following these results, Nedbank declared an interim dividend of 971 cents per share, reflecting an 11.5% increase. The company’s share price rose nearly 4% on the JSE after the announcement.