Nedbank powering ahead, still recruiting
Mike Brown has been true to his word. Earlier this year the Nedbank Ceo announced "the worst is behind is us" and pledged to move on from the shadow cast by last year's 4.5bn takeover bid by HSBC, which suddenly pulled out of the deal without giving a reason.
Now Nedbank says that first-half earnings will be up to 20% higher than in the same period of last year, thanks to a better than expected surge in business volumes, and that the group is well placed for earnings growth in the year ahead and will meet its financial targets in 2013. . First-half earnings will officially be announced on August 1.
It is a remarkable turnaround for the smallest of South Africa's "big four" banks, that in 2010 was struggling with high impairments and sluggish growth and was easily dismissed as a bride jilted at the altar by HSBC. Much of the focus has been on repositioning and strengthening retail banking. According to insiders, it was underperformance in this division which led HSBC to flee after the due diligence audit.
"Retail is our biggest challenge but also our biggest opportunity," says Mike Brown, Nedbank Ceo. "We have a strong wholesale base and huge retail potential. We understand that to reach our goal to be Africa's most admired bank we first have to be South Africa's most admired bank and we have much work ahead to achieve this, so our main focus will remain on building the group in South Africa and in particular improving and growing the retail offering." Over the next three years Nedbank will open 46 new branches and 230 outlets like kiosks at retail centres.
Given its recent success Nedbank, unlike other South African banks, has no plans to cut staff and is continuing to recruit in order to implement its growth strategy.
"We see good growth opportunities for the group so we are not actively seeking to retrench any staff at this point in the cycle," says Brown. "We have maintained good staff morale through the tough times. Now that we seek to grow revenue we shall be judicious in our cost management, but will hire in order to execute on the strategy."
Nedbank "is another success story, they are working very hard to rebuild their corporate image," says Tine Erasmus, general manager of Network Finance, a specialist recruiting firm in Pretoria. "There is lots of activity on the recruitment side. We have made a lot of placements with them this year and we are in active contact with them on a continuous basis. They foresee that the requirements for new staff will grow even more towards the second half of this year."
