Signs of further economic recovery in September, says Nedbank

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Nedbank says industry turnover in September stood at 98% of pre-lockdown levels ad was higher than in September 2019. Photo: Getty Images/Gallo Images
Nedbank says industry turnover in September stood at 98% of pre-lockdown levels ad was higher than in September 2019. Photo: Getty Images/Gallo Images

Nedbank says people are transacting frequently again, even though activity across its branches, ATMs and other channels remain below March 2020 levels. But looking at the entire banking industry's data captured on point of sale devices and digital channels, Nedbank said September 2020 sales stood at 98% of pre-lockdown levels.

Even though turnover levels were still slightly below March 2020, September surpassed the revenue levels that the industry recorded over the same month last year.

"Industry turnover data recorded on our point of sale devices and digital channels in Q3 2020 illustrates an ongoing recovery as lockdown levels eased, with turnover levels in September 2020 at 98% of March 2020 levels and an increase of 3% compared to the month of September in 2019," wrote the bank in a trading update published on Thursday evening.

The bank said it was clear that the economic environment had improved in the third quarter. Looking at sales that went through its point of sale devices in the first month of the lockdown, for example, Nedbank said turnover for April tanked to just 47% of what merchants had received from customers in March.

Because of this improvement in the macroeconomy, Nedbank said its financial performance has also received a boost compared to the second quarter of 2020. It recorded lower impairments in the third quarter, deposit growth remained robust and retail loan application volumes have now recovered to above pre-lockdown levels across all major products. Still, loan approval rates remained lower than they were pre-lockdown.

Nedbank said even though credit impairment growth remained elevated, it was lower than the 202% that the bank reported in its half-year results.  

As a result, that bank's credit loss ratio has decreased from 194 basis points in recorded in the six months to June to 185 basis points.

Nedbank said it had concluded more than 400 000 loan restructuring for clients who needed financial relief amounting to more than R121 billion by the end of September. It also paid out R1.1 billion under the government’s SME Loan Guarantee Scheme.

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