Nedbank doubles profit as its client numbers grow

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Nedbank grew its retail main-banked customers by 1%. Its CIB business added 35 new primary clients. The investment unit now has with over R424 billion in assets under management.
Nedbank grew its retail main-banked customers by 1%. Its CIB business added 35 new primary clients. The investment unit now has with over R424 billion in assets under management.
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Nedbank grew its headline earnings by 115% in 2021 as new customer numbers increased while bad debt provisions fell significantly from the 2020 highs.

The bank also grew its retail main-banked customers by 1%, while its Corporate Investment Banking (CIB) division added 35 large new primary clients. Its investment business recorded a 13% increase in assets under management, which has now reached R424 billion.

Nedbank said its new strategy, which the bank announced a year ago, has evidently resulted in market share gains in key products and improved levels of cross-selling. 

The revised strategy was all about growing Nedbank's share of the transactional banking market in SA. The bank also wanted to move more customers to digital channels and consolidate its branch network to achieve a lower operating cost base.

Areas where Nedbank managed to grow market share in 2021 include commercial transactional deposits, where its share increased by one percentage point to 16.6%. Its market share of retail overdrafts also grew from 8% to 9.9%, while personal loans grew from 11.2% to 12.2%. Nedbank's share of vehicle finance also rose slightly from 36.5% to 36.9%.

But the bank lost some market share in home loans, retail transactional deposits, credit cards and wholesale term loans.

The R11.7 billion in headline earnings that Nedbank recorded was still 7% below the 2019 levels. The bank's goal is to beat pre-Covid-19 performance levels only in 2023.

Nedbank CEO Mike Brown said even though the operating environment was more supportive for Nedbank and its clients in 2021, the government needs to accelerate structural reforms to help businesses bounce back to where they were before the pandemic or be in an even better position.

"The importance of accelerating structural reforms and energy supply security cannot be overemphasised, and they remain key to unlocking faster economic growth and job creation in SA over the medium-to-longer term," said Brown.

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