The Nedbank Group posts a solid set of results
Headline earnings up by 11% to R15.7 billion
Key takeaways:
- Solid Financial Performance amidst Challenges: Nedbank Group Limited anchieved an 11% growth in headline earnings to R15.7 billion for the year ended December 31, 2023, despite operating in a challenging economic environment.
- Commitment to Shareholder Value and Transparency: The decision to declare a final dividend of 1,022 cents per share, marking an 18% increase, reflects a strong commitment to returning value to shareholders.
- Achievement of Strategic Financial Targets: Successfully meeting all post-Covid targets for 2023, including surpassing 2019 diluted headline earnings per share and maintaining a high Net Promoter Score, illustrates the firm's strategic planning and execution efficiency.
- Investment in Technology and Sustainability for Future Growth: The nearing completion of the Managed Evolution programme and the bank's commitment to sustainable development finance demonstrate an innovative approach to business growth and social responsibility.
- Forward-Looking Leadership Transition: The upcoming retirement of CEO Mike Brown and the succession by Jason Quinn in May 2024 present an opportunity for continuity and fresh perspectives at the helm.
Comments on Nedbank FY23 results
Nedbank Group Limited reported a solid financial performance for the year ended December 31, 2023, with headline earnings up by 11% to R15.7 billion, supported by a 12% increase in revenue and associate income and an 18% increase in its final dividend to 1,022 cents per share. The company has successfully managed expenses and completed a R5 billion capital optimisation initiative, further enhancing earnings growth and return on equity. Notably, all strategic post-Covid targets for 2023 were achieved, including surpassing the diluted headline earnings per share from 2019 and maintaining the highest Net Promoter Score among South African banks. The bank's investment in technology and commitment to sustainability have positioned it strongly for future growth, aiming for a return on equity of 17% by 2025. As CEO Mike Brown prepares for his retirement in May 2024, he leaves behind a solid foundation for his successor, Jason Quinn, to further propel Nedbank Group's success.
Long term broker ratings and price target
A consensus of 11 analyst estimates sourced from Refinitiv data (as of the 6th of March 2024) suggests a long-term buy for Nedbank. A mean of these analyst’s price targets suggests a long term (12 month) fair value of 25215c for the stock.
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