Nedbank says that it expects to take significant earnings hit for the first half of the year, as the coronavirus pandemic and nationwide lockdown continue to put pressure on its clients. The financial services company warned in a trading statement on Friday (22 May) that its headline earnings per share (HEPS) and earnings per share (EPS) for the six month period ending June 2020 are expected to be more than 20% lower than the comparable period last year.
The drop in earnings is attributed to the ongoing “challenging conditions” the bank faces due to the global coronavirus pandemic, and the macroeconomic fallout thereof. The impacts of the Covid-19 pandemic and lower oil prices on economies are material and evolving. As a result, the impact on the banking industry and Nedbank Group’s results in 2020 remains uncertain,” it said.
“We will update investors on our revised 2020 financial guidance and medium to long-term prospects once we have more clarity. Despite the challenges, Nedbank said it is well prepared to respond to, and manage emerging risks. The group continues to be profitable and capital and liquidity metrics remained strong and in full compliance with all prudential regulatory requirements,” it said.
Nedbank says it has assisted more than 225,000 clients out of a total credit active client base of approximately 2.5 million to date, with debt relief across its product range – including home loans, vehicle and asset finance, personal loans, loans to SMEs and credit cards.
It said that its relief measures apply to the restructuring of loans that were in good standing at 29 February 2020, and are in place to enable clients to better manage cashflows through the lockdown. As at the end of April 2020 Nedbank said it had proactively approved and concluded restructures for eligible clients amounting to approximately R81 billion, split across segments.
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The Democratic Alliance (DA) case against Minister of Social Development Lindiwe Zulu will take place at the Western Cape High Court on Friday. Read more