Nedcor is now stable but there is still much to do to restore the South African bank’s performance, Jim Sutcliffe — CEO of Nedcor’s United Kingdom-listed parent, Old Mutual — said on Tuesday.
“But we can now concentrate on the future rather than the past,” he added.
He said the first six months of 2004 have seen Nedcor make good progress in restoring the performance of the group and laying a foundation for growth.
“But, as previously noted, it is going to take time for the full benefits of the recovery programme to emerge, although the progress and improvements made to date have been encouraging,” Sutcliffe said.
Notwithstanding the long road to recovery, important steps have been taken by Nedcor to fulfil the strategic imperatives that have been agreed with Old Mutual’s management.
These include the strengthening of capital through the completion of a R5,2-billion rights issue; the disposal of non-core operations outside South Africa; the installation of a new executive team; the reduction of risk and volatility through the repatriation of surplus capital and an interest-rate hedging programme; and tackling the expense base through retrenchments announced in the first quarter.
Sutcliffe added that Nedcor has repatriated, restructured and hedged offshore capital to reduce foreign-currency exposure from R7,1-billion to a net R3,1-billion during the past six months.
“The capital volatility arising from foreign-exchange movements has now been substantially neutralised.”
The bank is also continuing to focus on internal expense reduction as a key part of its recovery programme, he said. — I-Net Bridge