Harare – South Africa’s Nedbank which was recently separated from Old Mutual Plc said it successfully rebranded its Zimbabwe unit in the first  six months of the year. The local unit was officially rebranded to Nedbank from MBCA .

Nedbank Group said it recorded a strong performance in the first half of 2018, assisted by its share of associate income from Ecobank which returned to profitability. on the other hand managed operations delivered positive, but slower, earnings growth in line with its expectations.

The JSE listed banking group recorded a 27% earnings growth to R6.7  billion, which was however below the prior comparable period.

Nedbank Chief Executive, Mike Brown said slow revenue growth and a gradual increase in impairments were offset by good cost management.

“We maintained a strong balance sheet, as evident in our IFRS 9 fully phased-in tier 1 ratio of 12.4 percent and the interim dividend per share increasing by 13.9 percent. Total assets exceeded R1 trillion for the first time.

“Nedbank continues to make good progress in delivering market-leading client value propositions and digital innovations.

“This focus has enabled us to increase our total client base to over eight million for the first time, grow revenues and unlock operating efficiencies. In the second half of 2018 we look forward to the launch of more exciting innovations for clients,” he said.

On Nedbank’s strategic enablers Brown said, “…. ongoing technology investments, our people, our culture and our brand, are creating a more client-focused, agile, competitive and digital Nedbank.”

He added that given the strong growth in diluted headline earnings per share in the first half of 2018, together with expectations of a slowly improving economic outlook and ongoing delivery on Nedbank’s strategy, its guidance for growth in diluted headline earnings per share for 2018 remains unchanged, being in line with its medium-to-long-term target of greater than or equal to GDP plus CPI plus 5 percent.

The Group which own, control and manage six banks in SADC said it will continue to build scale and optimise costs.

“Our core banking system, Flexcube, has now been implemented in all subsidiaries (excluding Banco Único).

“We continued to launch a number of new digital products and reported a 146 percent increase in banking app transactions and a 6 percent increase in client numbers.

Nedbank Group commented on Old Mutual plc's managed separation strategy, which entails, among other things, the creation of a new South African holding company, Old Mutual Limited ('OML').

“The admission of, and commencement of unconditional dealings in, the ordinary shares of OML on the JSE as a primary listing and also on the London Stock Exchange, the Namibian Stock Exchange, the Zimbabwe Stock Exchange and the Malawi Stock Exchange took place on 26 June 2018.

“Listing of OML is the precursor to the third and final step of the managed separation and entails the reduction in OML's shareholding in Nedbank Group through the distribution of Nedbank Group ordinary shares to OML's shareholders.

“This will result in OML, immediately after the implementation of distribution or unbundling, holding a 19.9 percent strategic minority shareholding in Nedbank Group.”

Nedbank said it anticipated that its unbundling will take place approximately six months from the date of the OML listing as mentioned above, and will allow suitable time for the transition of the OML shareholder register to an investor base with an SA and emerging market focus and mandate.

“After the unbundling Nedbank Group is likely to see an increase in the number of its shares held by emerging-market-mandated index funds, which will adjust according to the improved Nedbank free float (from about 45 percent before unbundling to about 80 percent after unbundling) and a normalisation of SA institutional shareholding (some of which are currently underweight on a straight-market-capitalisation basis given some Nedbank Group holding through the OML shareholding).

Additionally, the Group said it continues to operate on a business-as-usual basis and the managed separation will have no impact on its strategy, its day-to-day management or operations, our staff or our clients.

“Our engagements with Old Mutual have been at arm's length and are overseen by independent board structures.

“Old Mutual operates predominantly in the investment, savings and insurance industry, which has little overlap with banking, even though we compete in the areas of wealth and asset management and personal loans. Our technology systems, brands and businesses have not been integrated.

“As noted before, our collaboration to unlock synergies will continue to be underpinned by OML's strategic shareholding in Nedbank Group. We are committed to working with OML to deliver ongoing synergistic benefits at arm's length,” it said.