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Nedbank sees boom in digitally-active clients

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Big-four bank Nedbank now has 2.53 million digitally-active customers in SA, an increase of 27% year-on-year from 1.85 million in the first half of 2020.

This emerged today, when Nedbank Group reported a strong financial performance for the six months to 30 June, as headline earnings increased by 148% to R5.3 billion off the low base in 2020, but remained 24% below H1 2019 levels.

According to the bank, significantly lower impairments, higher net interest margin and disciplined expense management boosted headline earnings.

Underlying non-interest revenue growth was strong thanks to higher levels of client activity and improved insurance income. However, this growth was negatively impacted by a high H1 2020 trading revenue base and an unwind of prior-year fair-value gains.

Nedbank chief executive Mike Brown says the group’s performance in the first half of 2021 reflects a strong financial recovery off a low base.

“Operating conditions in the first half of 2021 were better than we had expected at the start of the year, helped by improved commodity prices. This was evident in upward revisions to SA GDP [gross domestic product] growth, vaccine rollouts gathering pace and positive developments on key reforms.

“A 53-year low in interest rates supported robust demand for retail credit, while transactional activity increased off a low base and benefited from ongoing strong digital growth. Against this progress, demand for corporate loans remained muted and excess cash was used to repay debt, particularly in the commodity sector.”

The bank notes its “Managed Evolution” technology transformation programme has reached 81% completion, with most foundational IT programmes either complete or nearing completion.

It notes the rationalisation, standardisation and simplification of the bank’s core banking systems is enabling reduced infrastructure, support and maintenance costs, less complexity and increased agility in adopting new innovations.

“Our simplified digital client onboarding platform for individual and juristic (business) clients continues to mature and expand, enabling clients to open FICA [Financial Intelligence Centre Act]-compliant accounts remotely through our employee-assisted and self-service channels,” says Brown.

“The processing of product sales to individuals now includes our top six retail products after the implementation of home loans (minimal viable product).”

Brown adds that other products already on the platform include transactional products, personal loans, card issuing, investments and overdrafts.

“We have also delivered key wealth products, such as unit trusts and retirement annuities. We launched Apple Pay, which allows clients to make cashless, contactless payments using an Apple device. We also launched Money Message, an innovative solution that allows clients to make or receive payments through WhatsApp.”

The bank points out that its digital initiatives helped it to increase the number of retail digitally active clients in SA by 27% year-on-year to 2.35 million (H1 2020: 1.85 million).

This now represents 61% of main-banked clients (H1 2020: 55%), says Nedbank.

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