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Nedbank CEO Mike Brown has called on Government to show “material progress” in implementing structural reforms in the upcoming Medium-Term Budget Statement, as banks and other businesses continue to report massive declines in profits under the nationwide lockdown.
Brown reminded investors during the bank’s financial results yesterday that this time last year he warned the country was “fast running out of time and money”. He said yesterday that the impact of Covid-19, alongside a lack of progress in implementing structural reforms, have accelerated South Africa’s unsustainable trajectory.
“Urgent action on growth enhancing structural reform and reducing policy uncertainty is required to boost confidence, investment and growth and therefore reduce the impact of the crisis on already unacceptably high unemployment levels. It is vital that Medium Term Budget Statement shows material progress on these matters,” wrote Brown in a statement.
The Medium-Term Budget Statement is generally delivered in the second half of October.
Credit impairments increase
All banks that have published financial results for the first six months of 2020 so far have recorded increases is credit impairments.
Nedbank’s credit impairment growth came in between that of Standard Bank and Absa, increasing by 202 percent to R7,67 billion. In comparison, Absa’s credit impairment charge rose 297 percent to R14,7 billion, a 166 percent increase compared to June 2019.
The absolute value of Nedbank’s credit impairment charge reflects its smaller loan book size relative to Standard Bank and Absa. But the group recorded the biggest increase in non-performing stage 3 loans, which increased by 42 percent.
Due to these bad debt charges, the group’s headline earnings tumbled 69,2 percent to R2,1 billion.
Between April and June, Nedbank said it provided R78,4 billion in payment relief to its retail & business banking customers, R30,5 billion for clients in corporate & investment banking, R7,1 billion to Nedbank Wealth clients and R2,6 billion to clients in Africa.
It has also approved R1 billion of the R3 billion in applications it received for the Government backed loan guarantee scheme. — News24.com.
Online Reporter