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Financials

South Africa's Nedbank scraps financial guidance for 2020

JOHANNESBURG, April 14 (Reuters) - South Africa’s Nedbank Ltd has withdrawn guidance for its key financial numbers for 2020, blaming the economic disruption caused by the coronavirus pandemic.

The bank, among the country’s top four lenders, has also put its medium and long-term targets for return on equity under review, it said in a statement on Tuesday.

The announcement came two weeks after South Africa’s largest lender by assets, Standard Bank Group Ltd, withdrew its financial guidance, citing economic uncertainty.

Nedbank had forecast its headline earnings per share, the main profit measure in South Africa, for 2020 would grow at around the same pace as the country’s GDP - which it had expected would expand by around 0.7%.

It had also forecast numbers for other metrics such as bad debts and income earned from activities other than lending.

“Nedbank Group’s 2020 financial guidance as provided in our annual results announcement on 3 March 2020, has been withdrawn and our medium and long-term targets are under review,” the bank said in its statement.

South African President Cyril Ramaphosa announced a 21-day lockdown at end of last month to combat the spread of the coronavirus, which has so far infected 2,272 people and killed 27 in Africa’s most industrialised economy. The lockdown has since been extended to end of April.

The economy was already in recession when the virus outbreak reached South Africa, and the extra damage inflicted by the lockdown contributed to decisions by Moody’s and Fitch to downgrade their credit ratings for the country.

When announcing its full year results early last month, Nedbank had lowered its medium-term target for return on equity to greater than 17% within two to three years, from an earlier goal for a ratio greater than 18% by 2020. (Reporting by Promit Mukherjee; Editing by Mark Potter)

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