Nedbank Eswatini net income down 23%
MBABANE – The net income after taxation for Nedbank Eswatini contracted by 23.63 per cent from E65 581 566 in 2021 to E50 079 759 in 2022.
This was outlined in the bank¶s Interim )inancial 6tatements for the six months ended -une 30, 2022.
Nedbank Eswatini is also listed in the Eswatini 6tock Exchange (E6E) and its basic and diluted earnings per share (cents) also contracted by 11 per cent, they decreased from 266 cent in 2021 to 203 cents per share in 2022.
The hike in expenses for the bank contributed to the decline in income after tax, Nedbank Eswatini expenses increased by over E12 million in the current reporting period. They amounted to E150 045 370 in 2022 from E137 172 428 in 2021.
Nedbank Manging Director (MD) )ikile Nkosi, in the statement, said the first half of 2022 presented challenges in the global economy, which have filtered through to Eswatini.
6he said following the easing of C29 ID 1 restrictions and signs of recovery, the global supply chain experienced strain due to the conflict in Eastern Eu rope, which has led to rising inflation due to shortages in the supply of agricultural commodities, crude oil and natural gas.
³The Central Bank of Eswatini has adopted a contractionary monetary pol icy stance to address rising inflation, this has resulted in an increase of the bank rate by a cumulative 75 basis points in the first three MPCC meetings of 2022,” Nkosi said. The MD added that interest rates were expected to continue on an upward trend in 2022 in response to the inflationary pressure stated above.
6he said the Eswatini economy has remained resilient, with the country¶s Gross Domestic Product (GDP) expect ed to record a full year expansion in 2022 of 2.2 per cent. ³The country is expected to return to its pre C29ID growth path in 2023. Nedbank Eswatini /imited¶s Basic Earnings for the six months ended 30th -une 2022 were E50.1 million from
E65.6 million in 2021,” she said.
The bank added that for the six month period, their Net interest Income (NEI) improved by 7.6 per cent.
Growth
They said the benefit was primarily due to a 2.6 per cent growth in the loan book and a decline in amounts due to depositors of 6.5 per cent.
³The gain as described was enhanced by favourable increases in the interest rates when compared to the prior year,” mentioned Nedbank in the statement.
They further mentioned that impair ments of loans and advances charge of
E20.2m increased by more than 100 per cent when compared to 2021.
They said the charge in 2022 reflects the current risk profile of the loan port folio held. In addition, the six months of the prior year (2021) depicted releases from the initial impact of C29ID 1 , which they said saw the business carry significant provision as a hedge to the uncertainty experienced towards the end of December 2020. Non Interest Revenue (NIR) remained flat compared to the same period in 2021. Nedbank Es watini said this was a result of the bank offering digital solutions to customers, which were set to unlock value for the business in future.
³:e have seen an encouraging in crease in the usage of the Money $pp and Internet banking. The Bank contin ues to drive a digital product offering and is excited by the opportunities observed in the market,” they said.
2perating expenditure for the bank was recorded at E150 million in 2022 from E137.2 million in 2021 signalling an increase by .4 per cent.
They said the expenses of the bank include investments in the enablement of its digital platforms, which was a continued implementation of its strate gies over the last few years, as well as the acTuisition of talent.
³$lthough the overall cost base has increased, the business managed to gain efficiency in processes which has resulted in savings on key lines, such as reduced usage of paper and occupation of real estate,” they said.
Nedbank also added that their capital adeTuacy ratio was 15.8 per cent at -une 30, 2022, from 16.4 per cent in 2021, which was above the regulatory reTuirement of 8 per cent, and within the Board defined range of 15 per cent to 20 per cent. Capital and reserves totaled E886.8 million (2021 E 42.2 million). The bank¶s capital adeTuacy ratio was computed according to Basel II reporting principles as adopted by the Central Bank of Eswatini.
Nedbank mentioned that the growth strategy for the bank was through client acTuisition, continued investment in the digital platforms and process automation for competitiveness.