Trade Nedbank with Unum Capital.
To get started, email lester@unum.co.za
The share traded into the buy range (reached the lower boundary) and has rallied by 1500c. In the line with the price action model reading!
Previous Post (Thursday 20 March for Monday 24 March): Trading Nedbank: Early Model Trigger
The share is one few that has triggered an early buy reading on the short term time frame. Provisional buy re-entry range is between 25200c and 25500c.
Last close = 25926c.
Previous Post: Nedbank Full Year Results: 12 Key Points
Analyst's Disclosure: These results were summarized using an A.I tool.
Improved Performance: Nedbank reported an 8% increase in headline earnings, reaching R16.9 billion, and a strengthened return on equity (ROE) of 15.8%, indicating progress towards their financial targets.
Challenging Economy: The 2024 operating environment was difficult, with low South African GDP growth. However, a stable election outcome and gradual improvements in the fourth quarter provided some optimism.
Financial Results: Headline earnings growth was driven by strong non-interest revenue, lower impairment charges, and effective expense management, despite slower loan growth and margin pressures.
Shareholder Returns: Diluted headline earnings per share (DHEPS) rose by 11%, benefiting from share buybacks. A final dividend of 1,104 cents per share was declared, up by 8%.
Technology Transformation: The completion of the Managed Evolution IT transformation provided a modern technology platform, supporting digital growth and improved client satisfaction.
Strategic Gains: Nedbank achieved market share gains in key areas, including home loans, vehicle finance, and wholesale term lending, alongside growth in retail deposits.
Sustainable Finance: The bank continued its commitment to sustainable development, with substantial lending aligned with UN Sustainable Development Goals, and significant growth in renewable energy financing.
Operational Efficiency: The Target Operating Model 2.0 program delivered R3 billion in cost benefits through headcount reduction, real estate optimization, and back-office improvements.
Strategic Evolution: The new Transform agenda focuses on leveraging technology, data, and AI, optimizing processes, expanding insurance cross-selling, and diversifying into East Africa.
Organizational Restructuring: Nedbank is restructuring its Retail and Business Banking (RBB) and Wealth clusters for greater client centricity, creating Personal and Private Banking (PPB) and Business and Commercial Banking (BCB) divisions.
Cautious Optimism: Nedbank anticipates an improved South African economic environment in 2025, with forecasted GDP growth and declining interest rates, which gives confidence in continued ROE growth.
Strong Foundations: Nedbank emphasizes its strong capital and liquidity, vibrant culture, ESG leadership, and technology investments, positioning it for future growth and continued progress towards its ROE targets.
Lester Davids
Analyst: Unum Capital
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