The leaders of Ethiopia and Kenya are seeking to deepen cooperation with China at the second Belt and Road Summit in Beijing, while the Asian giant tries to find ways to rebrand its global development model
‘It’s absolutely business as usual’: Mike Brown, chief executive officer of Nedbank
Old Mutual, which owns 54% of Nedbank, will, after next year’s listing of a new South African holding company, distribute the majority of its Nedbank shares to Old Mutual shareholders. Nedbank is fully supportive of Old Mutual’s plans, chief executive Mike Brown tells The Africa Report.
“It is absolutely business as usual. There are no implications for strategy, operations, staff and customers. We have never integrated our systems, products or customers,” he says.
Nedbank’s 2016 results and a first-quarter 2017 update warn of tough times ahead. Nevertheless, its financial results reflect Nedbank’s ability to withstand the headwinds, with some cushion from its wholesale businesses.
In 2016, Nedbank lifted headline earnings by 5.9%, an increase that would have been 16.2% if one excluded the impact of the losses from Ecobank Transnational Incorporated (ETI, #16). Nedbank had taken a 20% stake in ETI to benefit from its local knowledge in Central and West African markets.
It is clear, Brown says, that the ETI investment has been disappointing, “driven predominantly by ETI’s Nigeria operations, which have been affected by the oil price and recession and weak credit risk management.”
Excluding the Ecobank drag, the group has fared well. “I think the key thing in an environment like this is the way we have been managing in the last three to four years in preparation for tougher times. We have been increasing capital and liquidity levels. We have increased levels of high-quality liquid assets and the term and duration of our funding book, and applied appropriate disciplines in credit granting.”
Brown concludes: “Revenue growth is more challenging in a low-growth environment, but we continue to see better-than-expected credit losses as a result of historic credit granting decisions, and this has stood us in good stead.”
From the September 2017 print edition