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Old Mutual's Nedbank to suffer from South African turmoil

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Staff Writer | May 18, 2017
Old Mutual
Banking   "...it will now be more challenging"

Old Mutual said Thursday its majority-owned subsidiary Nedbank Group Ltd will face challenges in 2017 due to political and macro-economic issues in South Africa.

Nedbank, in which Old Mutual has a 54% stake, said in its update for the first three months of 2017 that it expects "reduced levels of business and consumer confidence" due to the "volatile socio-political outlook and the weaker than expected macro-economic environment".

South Africa's President Jacob Zuma has faced protests amid a string of corruption scandals. Zuma also sacked his popular finance minister Pravin Gordhan in late March, prompting two credit ratings agencies to downgrade South Africa.

"We anticipate... it will now be more challenging to achieve the full 2017 year guidance provided at the time of the release of our 2016 annual results," said Nedbank.

In its full-year results for 2016, released in February, Nedbank had said its performance guidance for 2017 was for growth in diluted headline earnings per share "to be greater than the consumer price index plus GDP growth".


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