Nedbank’s non-interest revenue slump by 14% to E69.4 million
NEDBANK Swaziland’s noninterest revenue has decreased by 14 per cent from E88.8 million in the previous year to E69.4 million for the half year ended June 2017.
This is according to the bank’s half year results for the period between January and June 2017.
Non-interest revenue could be understood as creditor income derived primarily from fees including deposit and transaction fees, insufficient funds fees, annual fees, monthly account service charges; inactivity fees, check and deposit slip fees, and so on.
Conversely to the decrease of noninterest revenue, deposits reportedly increased by 15 per cent from E3 407 million to E3 928 million mostly twisted by wholesale banking.
The bank noted that it released its results at a time when the economy continued to take a hiding from global uncertainties as well as from domestic developments that has impacted growth.
The bank reported that its net interest income increased by 18 per cent to E131.6 million, mainly due to loans in the personal banking sector.
The bank also saw its headline earnings plunge by 16 per cent from just about E60.9 million to E50.9 million compared to the same period last year.
In a statement issued by the bank, Nedbank Managing Director Fikile Nkosi disclosed that they had anticipated a decline in headline earnings in their focus and budgeting.
But, she said they remain upbeat that they will achieve growth going forward.
“We, therefore, looked at enhanced channels such as the digital platform. Overall growth is there, but not in the traditional instruments which is depicted by usage picking up in our ATMs, point of sale devices, internet banking and the Mobile Banking App. The nature of the product cycle is that it tends to pick up slowly, but we are optimistic that by end of the year, uptake will be higher and we look forward to continued efforts to proliferate these channels,” she said.
The company’s profit after taxation decreased from about E60.5 million to about E51 million.
“Impairment of loans and advances charge for the period has increased by 36 per cent to E14.2 million (2016: E10.4 million). Growth in impairments is attributed to unfavorable economic conditions,” said the bank.
As at June 30, the bank’s capital and reserves amounted to E676.8 million providing a capital adequacy ratio of 23.1 per cent against the eight per cent statutory requirement.
In its outlook, the bank projects growth opportunities in the construction and agriculture sectors and therefore seeks to look into processes and policies to align itself with the requirements of these sectors.
“Moreover, Nedbank is poised to leverage on the new brand, which positions the bank as money experts who do good, through the emphasis on client experience and product offering,” said the bank.