Nedbank would next year avoid chasing growth for the sake of increasing its market share, but would continue to seek opportunities to grow revenues‚ said Ingrid Johnson‚ the group managing executive for retail and business banking
In an interview last week in Sun City‚ Johnson also said Nedbank would closely watch bad debts as there were signs that indebted customers could struggle if economic conditions worsened.
Johnson said without giving figures that Nedbank's strategy remained to further expand the non-interest and interest-fee income of the business and retail unit.
The banking group's total non-interest revenue rose 13.9% to R12.4bn and interest income was up 9.2% to R14.5bn in the third quarter to September. Analysts expect Nedbank's full-year earnings to grow by up to 22% after it posted a 23% increase in half-year earnings.
"It will be more of the same without taking our eyes off the ball (to expand revenue growth)‚" Johnson said.
Along with larger rival FirstRand‚ Nedbank‚ which is majority owned by UK-headquartered Old Mutual‚ has been one of the top two performing stocks of the big four banks. Its shares have responded to the bank's strategy to rehabilitate its once troubled retail unit the growth of which had been affected by high residential mortgages.
Johnson said problems in the mortgage book were now history as a result of a major restructuring of the retail unit that was now in its third year and still continuing.
She said Nedbank wanted "steady and measured" growth in customer numbers which totalled 5.6m as of June.
"There is opportunity to cross-sell our transactional products to existing customers‚" something Johnson said Nedbank would seek to take advantage of.
Business banking was another lucrative segment that Nedbank planned to exploit‚ including providing on-site retail banking for its business customers‚ she said.
The attraction was two-fold: a company already banking with Nedbank would be encouraged to recommend to its employees to open accounts with the bank and benefit from same-day value of their salary and wage payments‚ she said.
The other advantage was that Nedbank would have access to a captive customer base to which it could market its range of products‚ including mortgages.
"I would say up to 50% of our (new) housing loans are coming from (employees of) our business bank customers‚" she said.
Johnson acknowledged the banking sector would continue to face headwinds as rising customer debts‚ tepid economic growth and subdued credit demand next year.
She said Nedbank had already taken a more conservative approach towards growing its unsecured loan book and also continued to monitor growth of its residential mortgage business.
"We have what I believe is the (banking) industry's highest loan coverage ratios (for residential mortgages) and we are happy to be conservative in our approach‚" said Johnson.
She said innovation would be another key strategy to grow and defend market share and also migrate customers to digital channels.
An example of the success of innovation was the bank's ability to now respond to an application for a mortgage loan within three hours‚ said Johnson.