Q&A: Mike Brown

Nedbank's CEO talks to TJ Strydom about the group's results for the half-year to June.

Q: What do you think of the claims by the All Media Products Survey that Capitec has a larger market share than Nedbank?

A: I suppose what you can do is look at their client numbers and compare that to 6.4million [laughs] and make up your own mind. I'd let the numbers talk rather than listen to the marketing spin.

We've had good growth in client numbers, which is up 10%. Our total client numbers are up 570000 on June last year.

Q: Does that mean you are taking clients from other banks?

A: It's a combination of clients switching to Nedbank, of multi-banked clients across the industry and growth in our entry-level and youth markets. Ten percent is strong growth from a client numbers perspective.

Q: The growth in the number and size of unsecured loans has been a big issue in the past year or so. How exposed is Nedbank?

A: It is a tough point in the cycle for unsecured lending. All products are cyclical.

At Nedbank we have a total personal loans book that is 3.9% of our total advances.

We have the advantage of being very diverse. We've become much more conservative in how we provide for bad debts and have added more than R500-million to our provisions.

Q: Are unsecured loans and personal loans the same thing?

A: Well, people sometimes use them interchangably. What I am talking about here is actually personal loans.

Generally people would add together the card business and personal loans to get to unsecured lending. For us that would bring it to about 5% of total loans and advances.

But the challenge for the industry has been more in the personal loans segment, not in credit cards.

Q: Nedbank's headline earnings grew to R3.9-billion in the half year. Are you happy with the results?

A: We think it is a solid set of numbers in a difficult environment. Headline earnings are up 13% and we could declare a dividend that is 14% higher.