South Africa’s Nedbank expects to meet 2023 profit target ahead of schedule

Customers look on outside Nedbank, after the bank closed due to load shedding, at the Mall of the South in Johannesburg, South Africa, March 17, 2019. REUTERS/Siphiwe Sibeko/Files

JOHANNESBURG, March 9 (Reuters) – Shares in South Africa’s Nedbank NEDJ.J rose 3.3% on Wednesday after saying it would meet a 2023 profit target a year ahead of schedule and reporting a 114% rise in 2021 earnings.

Like all large lenders in the country, Nedbank is enjoying a rebound after hefty provisions for bad debts sparked by COVID-19 left a huge dent in profits, although it said these were still 7% below 2019 levels.

“The operating environment in 2021 was more supportive for Nedbank and our clients,” it said in its results statement, adding that the economy had performed better than expected at the start of the year in particular.

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It now expected to meet its 2023 target for headline earnings per share (HEPS) – the main profit measure in South Africa – a year ahead of schedule, while it was on track to meet other 2023 targets aimed at returning to 2019 performance levels.

Its HEPS in the year to Dec. 31 stood at 2.410 cents, up from 1.126 cents a year earlier, and towards the upper end of its forecast range.

The main driver of the rise was a 50% drop in impairment charges for bad debts to 6.5 billion rand ($426 million).

Nedbank also declared a dividend of 1.191 cents.

($1 = 15.2520 rands)

(Reporting by Emma Rumney; Editing by Rashmi Aich and Edmund Blair)

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