NEDBANK OPTIMISTIC ABOUT POTENTIAL BENEFITS OF GNU

MBABANE - “We remain cautiously optimistic around the potential benefits associated with SA’s government of national unity.’’

This was stated by the Nedbank Group Chief Executive (CE) Jason Quinn when delivering the bank’s half year financial results on Tuesday. He also mentioned that they expect better macroeconomic conditions in the second half of 2024, and into the medium-to-long term.
Quinn said, while trading conditions improved noticeably as some of the most pressing structural constraints on the economy eased as a result of stabilised electricity supply, progress in resolving some of the other infrastructure constraints remained limited. The CE further highlighted that global growth was expected to improve modestly, during the remainder of this year, before gaining slightly stronger momentum throughout 2025.  
He noted that the International Monetary Fund (IMF) forecasts world growth at a steady 3.2 per cent for 2024, strengthening marginally to 3.3 per cent in 2025.  
Improvements
He said most advanced and developing countries are likely to accelerate interest rate reductions throughout 2025 as inflation returns to targeted levels. He added that inflationary pressures for SA are forecast to ease further, ending 2024 at 4.4 per cent and averaging 4.9 per cent for the entire 2024.  He said the Nedbank Group Economic Unit expects monetary policy easing to begin in September 2024, with a cumulative 50 basis points (bps) reduction in interest rates in the second half of the year, taking the prime lending rate down to 11.25 per cent by the end of 2024, followed by cuts of a further 75 bps in 2025. Nedbank expects SA’s economy to fare better in the second half of 2024 and throughout 2025 if the recent improvements in electricity supply and confidence are sustained.  Quinn added that exporters should benefit from more reliable energy supply, firmer global growth and the anticipated upturn in commodity prices as the US interest rates decline and the US Dollar softens. “Consumer spending will also recover as inflation falls further, real household incomes return to growth and debt service costs decline on lower interest rates,” he said. It is also worth noting that the Nedbank Group delivered a relatively strong financial performance for the six months to June 30, 2024, amid a challenging operating environment as headline earnings (HE) increased by 8 per cent year-on-year (yoy) to E7.9 billion, and return on equity (ROE) increased to 15 per cent.

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