Good afternoon, welcome to everyone on the webcast, those dialing in via the telephone lines and via LinkedIn. Today, we are sharing the Nedbank Group's interim results to 30 June 2023, which I believe highlight that as a result of good strategic and operational performance, Nedbank has delivered a solid set of interim results in an external environment that has become increasingly more challenging. The format of today's presentation, as shown on the right of the slide, will start with myself providing an overview of the group's performance. I will reflect on our view of the operating environment in the first half of the year and the outcomes we achieved on our strategic growth drivers.
I will then hand over to Mfundo Nkuhlu, our Chief Operating Officer, who will provide an update on our Managed Evolution technology program and the increasingly positive impact that it is having on clients and our operations, as well as the progress we have made on our five strategic value unlocks. Mike Davis, our CFO, will follow Mfundo with a more detailed analysis of the Group's financial performance in the first half, including that of our frontline clusters. I will then return to close the presentation with our outlook for the remainder of the year and progress on our 2023 year-end targets and make some concluding remarks. Similar to prior interim reporting periods, our frontline cluster managing executives will not be presenting in person today, but are available for Q&A and will be part of our usual individual investor meetings during the course of the week.
You'll also notice, as usual, that some slides are marked Additional Info in the top right-hand corner. These are slides of additional information and insight for investors, and we will not speak directly to them today. Starting then with the overview. In the first half of the year, the operating environment for us and our clients was very difficult, as evident in weak SA GDP growth, severe electricity shortages, the impact of 350 basis points year-on-year interest rate increases, elevated levels of inflation, and volatile financial markets. We have, however, made good progress on the delivery of our strategy, and in our presentation today, we will demonstrate how our Managed Evolution technology, IT build program is progressing and is foundational for the delivery of strong digital growth metrics, maintaining market-leading client experiences, achieving market share gains in several key areas, and delivering ongoing productivity improvements.
We have also maintained our leadership in ESG matters, something that we know is important to all stakeholders. On the back of this strategic progress, we delivered an excellent operational performance, evidenced in pre-provisioning operating profit growth of 22%, a positive JAWS ratio of 7%, and a cost-to-income ratio that declined to 52.9%, somewhat flattered by the benefit of endowment and some restatements between non-interest revenue and expenses. From a financial perspective, headline earnings increased by a solid 10%, as revenues were up 14%, partially offset by a 57% increase in the impairment charge, largely in the consumer segment in Retail and Business Banking. Pleasingly, our ROE continued to increase to 14.2%. We also maintained very strong balance sheet metrics, enabling an 11% growth in the interim dividend.
Overall, we finished the half either in line with or slightly better than we had expected on all key metrics communicated at the time of our pre-close guidance, and continued to make steady progress towards the 2023 year-end targets, albeit that the worse-than-expected economic environment does make these harder to achieve. Reflecting now on the external operating environment in a little more detail. The global macroeconomic environment has been challenging, impacted by the ongoing war between Russia and Ukraine, aggressive monetary policy tightening across the globe, and concerns around bank failures in the U.S., and to a lesser extent, in Europe. In addition to this, the operating environment in South Africa was impacted by a number of South African-specific issues, including severe electricity shortages, with the total hours of load shedding up to May this year exceeding that in the whole of last year.
Foreign policy matters resulting in the questioning of our non-aligned status. While some progress continues to be made on structural reform, overall progress is slow. Outcomes in H1 2023, as a result, were weak, as evidenced in the graphs on this slide, showing a decline in business confidence, a decline in the energy availability factor at Eskom, a rise in bond yields, depreciation in the rand, and a trend of continued bond and equity sales by foreigners. Bond sales are particularly important to South Africa, given our fiscal deficit that we run of somewhere between 4% and 5% of GDP. In other words, our government spends more than it collects in taxes, and this has to be financed and requires gross bond and other borrowings by government of approximately ZAR 2 billion per trading day to balance the books.
Unfortunately, as a result of all of this, it means that South Africans continue to become poorer, with long-term declines in real GDP per capita in rand terms, and even more so in dollar terms, as shown on the bottom right-hand graph.... At the Group's 2022 full year results presentation in March this year, I highlighted that urgent and decisive action was required by government, labor, civil society, and business to unlock South Africa's undoubted economic potential and ensure higher levels of sustainable and inclusive economic growth. Recent announcements by business under the B4SA platform, supported now by 125 chief executives, and government, led by the presidency, on a program of action focused on improving outcomes on the three very important issues of energy and electricity, logistics and transport, and crime and corruption, are a welcome step forward here.
While there has been good progress in private renewable energy generation, as evident in the increase in installed rooftop solar and renewable energy registrations, electricity supply from Eskom has declined year-on-year, with a small improvement seen in the second quarter. In addition, the closure of the IPPPP rounds continued to experience delays. Load shedding can be reduced materially by the end of 2025 if Eskom production does not deteriorate, grid constraints are addressed, new IPPPP capacity is built and connected to the grid within planned timelines, and private power generation continues to accelerate. The financing opportunity of new renewable energy projects in the South African Just Energy Transition Investment Plan was estimated to be ZAR 475 billion by 2027, providing a strong multi-year growth opportunity for Nedbank as leaders in renewable energy finance.
Progress on logistics and transport has been slow, but the recent announcements on the Durban and Richards Bay ports are encouraging, and significant work still lies ahead, both here and in the crime and corruption work stream. Turning now to the operating environment on the consumer or retail side of banking. The key theme here is that in addition to the weak economy and load shedding, consumers, particularly those in the middle and lower income segments, are under increasing pressure from the combined impacts on disposable income of the higher than expected interest rates and persistent high levels of inflation.
The 350 basis point year-on-year increase in interest rates, and indeed 475 basis points since the interest rate hiking cycle began in October of 2021, has been both steep and steeper than expected, and compares to the extent of increases experienced during the global financial crisis, as shown in the graph on the top left. Although the prime interest rate, currently at 11.75%, is still well below the 15% peak in 2008. Inflation has remained above the SARB target range for most of 2022 and into the first half of 2023, but pleasingly, has started trending down and dipped back into the SARB target range in June of this year at 5.4%.
The underlying challenge for lower income consumers has been high levels of food inflation, which peaked at 14% in March and is also pleasingly starting to trend down, with the latest number at 11% in June. On the top right of the graph, while aggregate households managed to increase their savings during the very difficult COVID period, these savings have now been depleted as disposable income has come under increasing pressure. While there is an expectation that these pressures on consumer borrowers could ease over the next 12 months, as interest rates and inflation have now likely peaked, there is still some upside risk that we are all watching closely. Pleasingly, metrics such as the household debt ratio, debt service cost, and retail credit growth have all been contained well below global financial crisis levels.
The pressure on consumers' disposable income is also illustrated in data we extract from our own main banked clients in our retail consumer portfolio, as shown on this slide. Income growth of just under 5% has been eroded by double-digit increases in loan repayments in floating rate products, such as home loans and vehicle finance, along with higher levels of growth in essential expenditure items such as groceries, education, and healthcare. This has left many consumers with little option but to spend less on discretionary items, such as clothing and home improvements, and has also led to higher levels of arrears and defaults on their lending commitments.
To support our clients during these challenging times, we have offered clients tailored payment plans to help address their temporary financial distress, and provided restructures and debt consolidation options that reduce monthly debt payments to help clients deal with the increase in interest rates and keep them in their homes and in their cars. My final slide on the operating environment highlights the underperformance of key economic indicators versus economic expectations of these over the last few years. The increasing constraints placed on GDP growth by issues such as electricity shortages, have resulted in GDP growth expectations for 2023 being revised downwards by 1.5% since the start of 2022, and we now expect growth of 0.3% this year.
Inflation has surprised on the upside, given the impacts of global supply chain constraints and higher energy and food prices, to name a few. Average inflation of 5.7% for 2023 is well above the February 2022 expectation of just about 4%. On the back of higher levels of inflation and global monetary policy tightening by central banks, the prime interest rate has also increased by more than economists previously expected. At 11.75%, Prime is now 4.75% above the 2021 lows and 2.75% above our own expectations for Prime in February 2022. Industry credit growth expectations remain moderate and did not change materially over the past few years, although 2022 saw slightly stronger growth than expected. Turning now to our strategy.
This slide you should be familiar with and is designed as a framework to orient investors around key elements of our strategy on one page. Our three strategic value drivers are shown at the top of the slide, being growth, productivity, and risk and capital management. I will unpack some detail on our ongoing progress on these shortly. Underpinning the delivery of these three are five strategic value unlocks or more detailed programs of action that are all enabled by our Managed Evolution IT strategy. These you can see in the middle of the slide. Mfundo Nkuhlu will cover our progress on these after I conclude. Starting then with growth as our first strategic value driver, the graph on the left shows how trends across NII, NIR and advances growth have changed over the past few reporting periods.
The endowment benefit from higher interest rates has been very favorable for strong NII growth. NIR growth continues to be supported by client-driven activity, with CIB recording 10 primary client wins in the period, and RBB growing main bank clients strongly by 11% and Nedbank Africa Regions growing their client base by 5% year on year. Non-interest revenue growth in the first half of 2023 was also negatively impacted by around 3% due to some restatements between non-interest revenue and expenses that Mike Davis will talk to later. Pleasingly, all digital metrics also continued to grow very strongly, with app volumes, the key retail channel, up 22% year on year and up by more than 370% since 2019, and our retail cross-sell ratio improved to 1.95 times.
Markets positively benefited assets under management in our asset management business, which increased by 12% since December to ZAR 441 billion, and trading income increased by 2% in a volatile and difficult market. From a productivity perspective, we continued to see the outcomes of our optimization efforts, alongside the benefits of endowment, contributing to a lower cost-to-income ratio, showing a pleasing improvement from 55.8% to 52.9%, while pre-provisioning operating profit grew by a strong 22%. The cost-related productivity improvements have, in large part, been driven by the benefits from implementing our Managed Evolution IT build that is now 93% complete.
This enables increased client use of our more cost-efficient digital channels, as well as ongoing process improvements alongside headcount reduction, mainly through natural attrition and real estate, real estate optimization, amongst others, contributing to the ZAR 1.7 billion of TOM 2.0 savings to date. The group's intangible software assets on balance sheet peaked in 2020 at ZAR 9 billion, and related levels of IT cash flow spend peaked in 2017 at around ZAR 2.3 billion and have subsequently reduced to around the ZAR 1.6 billion level as we near completion of the Managed Evolution. Lastly, our key risk and capital management metrics continue to reflect a fortress balance sheet, even after completion of the ZAR 5 billion capital optimization initiative in H1.
Starting at the top left of the slide, our CET1 ratio at 13.3% remains well above the 12% top end of our board target range and includes the 70 basis point impact from the capital optimization initiative. On the bottom left, liquidity metrics, such as our liquidity coverage ratio and net stable funding ratio, also remain strong. On the top right, these robust capital and liquidity metrics, along with an 11% growth in headline earnings per share, supported an interim dividend of ZAR 8.71 per share, declared at the bottom end of our 1.75-2.25x target cover range and up 11% on the 2022 interim dividend.
On the bottom right, our credit loss ratio increased to 121 basis points, which, as we guided in our pre-close statement, is above the 100 basis point top end of our through the cycle target range, with most pressure evident in the consumer segment in RBB. Mike Davis will also unpack this in more detail later. The Group's overall impairment coverage ratio increased to an all-time high of 3.67%, highlighting ongoing prudency in balance sheet provisioning in uncertain times. I will now hand over to Mfundo Nkuhlu, our Chief Operating Officer, to talk to the progress made on our IT strategy and related outcomes in more detail, as well as our strategic value unlocks.
Thank you, Mike. Good afternoon, everyone. I'm pleased to report that delivery on the group's strategy is progressing well and is delivering financial benefits as planned. In my section today, I will cover the group's 5 strategic value unlocks. I will start with an update on the progress we have made on our Managed Evolution technology strategy and importantly, how this is evolving. I will deal with each of the strategic value unlocks in more detail. With the IT build of our Managed Evolution technology strategy nearing completion, the focus is primarily on modernizing and refactoring our core banking systems, and this is expected to be completed by the end of 2024.
As we close out the program, the focus now shifts to leveraging our new technology stack to simplify our product range, making banking easier and more affordable for our clients, migrating existing accounts onto the new products, converging for scale across all segments, all channels, and all geographies, including harmonizing our IT systems in Nedbank Africa Regions. Further optimizing processes and leveraging data and generative artificial intelligence for competitive advantage. The modernization of our core banking systems at 84% completion enables us to start with the simplification and rationalization of our core banking product sets. Our transactional product set will see an estimated 60% reduction in the number of products, while our investment product set is targeting an 80% reduction. This will be achieved by leveraging configurable generic products with flexible pricing. The sizing of the opportunity in lending product rationalization is currently work in progress.
As shown on the right-hand side of the slide, the benefits of modernization also include increasing levels of real-time processing, leveraging modular components, becoming more efficient and more agile, and enabling the quicker launch of new innovations to market, as well as becoming more client-centered. The additional benefit of our new technology platform is that it also allows a quicker and more seamless integration of AI technologies, which I will talk to shortly. As an illustration of our transactional product optimization, in May this year, we launched 3 new MiGoals transactional products for our consumer banking clients, and they have seen strong sales growth. These are the first products released off our new core banking platform and form part of the optimization of our transactional product range from 46 to 18.
MiGoals will be followed by the release of similar transactional products for private clients, high net worth clients, and small businesses, as well as the relaunch of an optimized set of savings, investment, and lending products. Turning to an overview of the multiple benefits that have been derived from our world-class technology platform and enhanced digital innovation processes that we have put in place over the past few years. For our clients, starting on the left, client onboarding is now mostly done digitally via our Eclipse platform for 99% of our retail clients. Digital services have been automated, and today, more than 210 retail client services and 435 juristic services are available digitally on apps and electronic platforms, enabling our clients to self-service. From a product sales perspective, 56% of retail sales are done digitally, up from 12% in 2019.
As shown on the Additional Info slide, Money app transaction volumes and values increased by more than 300% over this period, and year-on-year trends also continued to show growth in double digits. Client experiences continue to improve, with Nedbank ranked the number 1 SA bank on Net Promoter Score, and our brand ranking in South Africa improving from number 9 to number 8 position. Lastly, the modernization of our payments domain has assisted us to lead in the South African industry Rapid Payments Programme, PayShap, a low-cost, immediate, interoperable digital payment solution that was successfully launched in March 2023. Nedbank has been widely acknowledged for our market-leading pricing, which allows for even greater financial inclusion. Benefits for Nedbank are shown on the right of the slide. As systems became more simplified and we adopted agile work practices, the cost of innovation has decreased by 39%.
At the same time, we are reporting some of the best systems availability in the industry at 99.2%. From an operational efficiency perspective, by adopting digital practices, we managed since 2019 to reduce floor space and decrease headcount, mainly through natural attrition, all contributing to the total of ZAR 3.7 billion of Target Operating Model cost savings in both TOM 1.0 and TOM 2.0 to date. We've also seen revenue benefits, as evident in an increase in retail cross-sell ratios, while new digital capabilities allow us to sell value-added services, recording growth of almost 200% over the period. Our world-class technology platform is also enabling us to unlock new revenue streams.
Our Avo super app, which provides a platform to more than 23,000 businesses to sell their products and services, has signed up 2.3 million users since its launch in 2020 and increased 44% year-on-year. The value of merchandise sold, a key indicator of activity on the platform, increased 70% year-on-year. A key development in the second half of the year is the launch of Avo in our Nedbank Africa Regions subsidiaries. We've also invested significantly in our data capabilities, leveraging big data and artificial intelligence through strong analytics teams. Our current AI engine has generated benefits by using machine learning and data science techniques to make intelligent, data-driven decisions, and we have delivered more than 40 use cases in recent years.
An exciting new development for us is the next stage of our long-standing partnership with Microsoft, which will see us work on Copilot, a new generative AI tool, and secure 300 AI licenses to explore how their artificial intelligence technology can assist to enhance productivity and processes, reduce risk, boost creativity, and increase sales. The great client satisfaction outcomes and our digital capabilities, evident in Nedbank being recognized as the number one in Net Promoter Score and social media brand sentiment, are key drivers of client growth and improved cross-sell. In RBB, the number of retail main bank clients grew 11% year-on-year to 3.4 million, and cross-sell was 1.95 times, up from 1.72 in 2019 and 1.92 in 2022.
Supporting this was a 23% increase in the number of active Money app users to over 2.2 million, and digitally active clients increasing by 14% to 2.8 million. The benefits from our Managed Evolution, IT investments and digitization are also evident in efficiencies tracked in our Target Operating Model programme. At the end of June 2023, the cumulative cost benefits realized through TOM 2.0 have increased to ZAR 1.7 billion. Through Projects Phoenix and Imagine, we continue to shift our RBB organizational structure to become more client-centered and also to optimize our branch infrastructure to deliver great client experiences, enhance sales, and improve productivity levels.
This was also evident in the recent Finalta survey results that saw Nedbank improve significantly in areas such as sales per active client and branch sales per full-time employee, while reducing in the number of employees per 10,000 active clients, largely through natural attrition. Branch floor space has decreased by a further 11,000 square meters in the first half of the year, and our own real estate office space by a further 20,000 square meters. The target of achieving ZAR 2.5 billion of benefits for TOM 2.0 remains in place. Due to conscious decisions to reconsider the timing of the implementation of some initiatives that are linked to revenue uplift and a delay in some cost-saving initiatives, we are not likely to meet the target in 2023, but now expect to reach it during 2024.
In addition to the ZAR 2.5 billion target, we are exploring further benefits related to data and process optimization. Turning our focus now to areas that create value. We have seen traction in gaining profitable market share in key areas while we remain selective in a difficult environment. Wholesale team loan market share increased to 17.1%, as reported in the latest May 2023 BA900 data.... We remain focused on unlocking growth opportunities relating to infrastructure and renewable energy, in particular. In home loans and overdrafts, we increased our market share to 14.2% and 12.9%, respectively. In areas such as commercial property and vehicle finance, where we have large market share positions, we have been more selective in our credit granting, and we're comfortable to give up some share.
In personal loans and card, we have grown slower than market and deliberately given up market share, given the difficult macroeconomic environment. Pleasingly, our focus on deposits has seen us gain market share in key categories, with household deposits up 14.8% and commercial deposits up to 17.5%, respectively. Nedbank is a purpose-led and values-driven organization, with our purpose being to use our financial expertise to do good for individuals, families, businesses, and society. Through our fifth strategic value unlock, we focus on creating positive impacts and driving sustainable socioeconomic development by delivering on our purpose. As shown in the graph on the left, at the end of June 2023, we have provided SDG-related finance to the value of ZAR 134 billion on our balance sheet. This now represents 15% of the group's gross loans and advances.
By 2025, we aim to increase this to around 20% through the support of projects and initiatives of around ZAR 150 billion in areas of sustainable development financing. This financing was supported by some of the initiatives we highlight on the right of the slide, and let me mention just a few. We increased our support to the agricultural, to the agricultural sector to ZAR 30 billion, provided ZAR 21 billion of financing to small and medium enterprises, and provided ZAR 1.6 billion towards new affordable housing loans, supporting more than 2,600 homes. Renewable energy finance exposures increased to ZAR 28 billion, and our pipelines across solar rooftop finance, private generation, and our participation in the next rounds of REIP have increased to a combined ZAR 24 billion.
Once drawn down, we would have supported renewable financing of more than 6 gigawatts. Sustainable finance also continues to see good progress, with exposures increasing by 28% to ZAR 15 billion since December 2022. Lastly, from an ESG perspective, we continue to rank at the top end of our local and global peer group across all the major ESG ratings, as shown on the left-hand side of this slide. A few key highlights in H1 2023 include the following: maintaining our Level 1 Broad-Based Black Economic Empowerment status under the current FSC, Being acknowledged at the 22nd Top Empowerment Awards for our contribution to transformation in South Africa. We welcomed our fourth intake of more than 2,800 Youth Employment Service participants as we continue to make an impact on the South African youth, their families, and communities.
We continue to focus on employee morale and wellness of our employees. Our recent employee survey highlighted high levels of employee engagement and satisfaction. Finally, for participating shareholders, we concluded the odd-lot offer as part of the group's ZAR 5 billion capital optimization program. I will now hand over to Mike Davis, our CFO, to take us through the review of the group's financial performance.
Thank you, Mfundo. Good afternoon, everyone. I'm pleased to report that the group delivered a solid financial performance in H1, with headline earnings up 10%, driven by strong revenue growth, partially offset by higher impairments, particularly in the consumer segment of our retail cluster. We'll have a look at the underlying drivers of these results in the next few slides. As highlighted by Mike, on the one hand, the operating environment has deteriorated, but as Mfundo showed, we have made good progress on the delivery of our strategy, these having negative versus positive impacts on the group's H1 financial performance, as shown in the ticks and crosses on the slide.
Reflecting on the key drivers of shareholder value creation, we were pleased to report a net asset value per share increase of 8% year-on-year to above ZAR 225 per share, implying a price to book ratio of around 1x using the share price at 30 June 2023. The group's ROE improved further to 14.2%, up 80 basis points on the prior period, and we continue to work hard to get the ROE to above our cost of equity of 14.8%, and then to our 2023 and medium-term targets. This supported our interim dividend of ZAR 8.71. All of the group's profitability metrics improved, as seen in the solid headline earnings, HEPS, and earnings per share growth, while pre-provisioning operating profit growth was very strong at 22%.
Our NIM increased by 33 basis points to 4.18%, whilst our credit loss ratio increased by 36 basis points to 121 basis points, while total coverage remained prudent at 3.67%. Our balance sheet remained robust, with strong liquidity and capital positions well above board and regulatory requirements. Turning to our usual waterfall graph, where we unpack the key drivers of the headline earnings growth, NII increased strongly by 18%, NIR by 7%, and associate income by 53%, combining to produce revenue growth, including associate income of 14%, which was a key driver of the solid financial performance in the first half. Impairments increased by 57%, partially offsetting the strong revenue growth, while expenses were well managed, increasing by only 7%.
Reflecting on the balance sheet, average gross banking advances increased by 9% year-on-year. In RBB, the growth momentum continued as average banking advances grew by 7% year-on-year, primarily driven by strong performances in our SME and commercial client segments, as well as in secured lending, while we have been deliberately cautious in unsecured lending categories. Growth in CIB's average banking advances was strong at 12% year-on-year. Converting opportunities in our pipelines, such as closing various renewable energy transactions that are currently underway, should support growth in the second half of the year. High levels of client repayments remain a risk to balance sheet growth. On the opposing side of the balance sheet, deposits increased by 8%.
Due to the favorable investment, interest rate environment, many clients took the opportunity to term out short-term savings into long-term investments. As a result, current and savings accounts, along with cash management deposits, decreased by 2% and 3%, respectively. In contrast, call and term deposits increased by 14% and fixed deposits by 33%. NCDs increased by 3% as our requirement for wholesale funding declined. Foreign funding, although small in relative terms for Nedbank at 3% of total funding, increased by 38% due to higher foreign lending requirements and foreign currency movements.
Pleasingly, as shown in the right-hand pie chart, over the past few years, our reliance on wholesale funding has declined significantly, from 40% to 33%, as a result of growing commercial funding contribution from 28% in 2019 to 35%, and more recently, household funding increasing from 18% in 2022 to 19%. Turning to the income statement, NII increased strongly by 18%, driven by the 33 basis point increase in the net interest margin. The increase in NIM was driven by a 48 basis point endowment benefit from higher interest rates and benefits relating to the Nedbank Africa Regions, offset to some extent by adverse asset mix and negative asset and liability pricing. Asset mix and pricing had a 21 basis point negative impact on NIM, with liability mix and pricing adversely impacting NIM by 4 basis points.
The negative asset mix impact of 7 basis points was driven by the faster growth in term loans and unsecured lending products when compared to a deliberate slowing in unsecured loans, while pricing pressure in assets and liabilities reflect the impact of increased competition for good quality assets and funding. NIR growth was 7%, the key drivers include commission and fees increasing by 4%, driven by improved levels of client transactional activity, growth in main bank clients, and increased levels of cross-sell in RBB and CIB. In RBB, value-added services volumes and card interchange volumes grew by 30% and 17%, respectively. Excluding restatements between NIR and expenses, commission and fees grew by 6%. Trading income grew by 2% on the back of positive outcomes in FX and debt securities, offset by lower performances in equities.
Insurance income increased by 4%, driven by higher funeral policy sales and lower relative non-life claims due to the KwaZulu-Natal floods in H1 2022, offset by lower reserve releases when compared to the prior period. Equity investment income returned to more normalized levels compared to the high H1 2022 base, driven by revaluations, private equity gains, dividends, and operational revenues, as well as limited disposals. Currency gains in Zimbabwe on US dollar capital as a result of currency devaluation were partially offset by a higher net monetary loss due to hyperinflation.
Lastly, fair value gains of ZAR 239 million includes ZAR 169 million of fair value gains on structured loans within the banking book, and small gains of ZAR 70 million relating to the group's hedge accounted portfolios, following the successful macro fair value hedge accounting methodology enhancements in the prior years. Several good restatements were made in the period, adversely impacting NIR, and excluding these, NIR would have increased by 10%, as shown in the Additional Information slide. Associate income relating to our 21% shareholding in ETI increased by 59%. This includes our share of earnings from ETI for Q4, 2022 and Q1, 2023, and the reversal of the ZAR 175 million estimated impact of the Ghana Sovereign domestic debt restructure that we as Nedbank took in 2022.
In the graph below, the carrying value of our investment at June 30, 2023 was ZAR 1.8 billion, against the market value of ZAR 2 billion. The return on our original investment has improved to 24% from 15% in the prior period. Excluding the ZAR 175 million reversal, the return on investment was 18.5%. Turning to impairments, the group's impairment charge increased by 57% to ZAR 5.3 billion, driven by a 60% higher impairment charge in RBB, due to the pressure experienced in the consumer segment of our business, primarily as a result of the impact of higher interest rates on rate-sensitive products such as home loans and vehicle finance, and the impact of higher levels of inflation across the portfolio.
In home loans, it is particularly the vintages written at the bottom of the interest rate cycle, being half to 2020 and 2021, that are proving most challenging. Although, we can see signs of stress across most vintages, with entry-level clients having been most affected. Vehicle finance has seen strain across most vintages, but the impact has not been as severe as in home loans. Personal loans and card have experienced strain across many vintages and client segments. The impact of load shedding and higher input costs has been most evident in the pressure seen in clients operating in parts of the agricultural sector. Good outcomes were experienced in CIB, Wealth, and Nedbank Africa Regions, with stage fee loans in CIB reducing and workouts relating to clients and business rescue progressing, but risks remain. The group's central provision remained unchanged at ZAR 300 million.
As a result of the higher impairment charge, the group's credit loss ratio cost of risk increased to 121 basis points, outside of our through-the-cycle target range of 60-100 basis points, but in line with the guidance we provided in our full involuntary trading update and pre-close call. The CIB credit loss ratio, at 16 basis points, was below the 20 basis points reported in the prior period, and within the clusters through the cycle target range of 15-45 basis points.
The credit loss ratio in RBB increased to 226 basis points, to above the through-the-cycle target range of 120-175 basis points, and up from the 152 basis points reported in the prior period, with credit loss ratios of all consumer products above their respective through-the-cycle target ranges. Wealth reported a credit loss ratio of 3 basis points, driven by the release of client-specific overlays. The Nedbank Africa Regions' credit loss ratio of 113 basis points increased slightly, but remained within its through-the-cycle target range of 85-120 basis points. The Group's balance sheet expected credit loss ratio, credit loss or ECL, increased to ZAR 30.8 billion from ZAR 27.9 billion in December.
This increase was driven by the ZAR 5.3 billion impairment charge and includes post-write-off recoveries of ZAR 695 million. Write-offs remain conservative at ZAR 4.1 billion. From a coverage perspective, total ECL coverage increased to an all-time high of 3.67%. Stage one loans and stage two loans and coverage increased slightly, while stage three coverage also increased slightly, as stage three loans grew 11% year to date, with RBB loans migrating from stage two into stage three, partially offset by a decline in stage three CIB loans. The main driver of the increase in total ECL coverage was a larger contribution from stage three loans, driven by an inflow of RBB secured loans with higher collateral and therefore lower coverage.
Shifting our focus to costs, expenses increased by 7%, reflecting good expense management as we maintain our focus on efficiencies and leverage the benefits of digitization. The increase was primarily driven by an increase in variable incentives that are aligned to improve profitability metrics, as well as higher vesting probabilities on long-term incentives. Excluding incentives, expenses increased by just 6%, reflecting a solid operating environment in a higher inflationary environment. Staff, salaries and wages, and other employee costs increased by 6%, reflecting the impact of an average annual salary increase of 6.3%. This was partially offset by a 2% decline in headcount, largely through natural attrition. Computer processing costs increased by 7%, reflecting the impacts of increased IT volumes and the rand's devaluation on foreign currency IT contracts.
This was partially offset by a decline in the growth rate in the amortization charge and benefits from moving to cloud-based solutions. Discretionary spend has now reached normalized levels post-COVID, but costs associated with increased levels of load shedding had to be absorbed. Several restatements were made in the period positively impacting expenses, and excluding these, expenses would have increased by 8%, as shown in the Additional Info slide. With respect to capital, our CET1 ratio decreased to 13.3% post the material completion of our ZAR 5 billion capital optimisation initiatives, and it remains well above board-approved target ranges of 11%-12% and the minimum regulatory requirement.
High levels of credit growth resulted in a 60 basis point RWA capital impact, with the payment of the final 2022 dividend taking off a further 70 basis points, both of these being offset by current year profits of 120 basis points. With regards to the capital optimisation initiative, which were materially completed by 30 June 2023, we acquired 20.2 million shares for a total value of ZAR 4.25 billion under a general repurchase program, as well as 2.7 million shares as part of the odd-lot offer of ZAR 638 million at an average overall share price of ZAR 213, being 5% below the group's 30 June net asset value per share of ZAR 225.
The repurchased ordinary shares were canceled and delisted, ROE and Earnings per share metrics will continue to benefit in the coming reporting periods. Pleasingly, the group remains capital generative. Turning to cluster performances, CIB produced a resilient performance with headline earnings growth of 2% and its ROE improving to 18.2%. This performance was driven by solid revenue growth of 5% and an 8% decrease in impairments, evident in its credit loss ratio declining to 16 basis points towards the bottom end of the cluster's through-the-cycle target range. NII increased by 7%, supported by average banking loans and advances growth of 12% and endowment benefits, offset by advances mix changes and increased competition for high-quality advances.
NIR increased by 2%, supported by an 8% increase in commission and fees arising from higher levels of activity and deal closures, and 2% growth in trading revenue, partially offset by a 41% decline in private equity income of a high H1 2022 base, as well as the delay in closing renewable energy rounds into H2 2023. Expenses growth, expenses grew by 9% due to higher costs associated with the retention and attraction of talent. RBB delivered very strong pre-provisioning operating profit growth, up 24%, but this was offset by materially higher impairments, up 60%. As a result, headline earnings declined by 8% and ROE declined to 12.8%. NII increased by 16%, driven by an increase in average advances and a widening of NIM of 34 basis points.
NIR increased by 7% due to strong client transactional activity, the benefit of higher levels of cross-sell, the increase in main bank clients, and growth in card acceptances and interchange volumes. The increase in impairments was experienced across all portfolios owing to the deteriorating macroeconomic environment and elevated risk outcomes, as explained in my previous slides. As a result, management have materially increased their focus on both origination and collections in the current environment. Expenses grew by 6%, driven by the judicious management of discretionary spend and ongoing optimization of operations through Project Phoenix, Project Imagine, and other TOM 2.0 initiatives. Nedbank Wealth delivered very strong headline earnings growth of 41%, and its ROE improved to 30%.
NII increased by 68 basis points, positively impacted by higher SA, US, UK, and EU interest rates, with NIM widening from 1.77% to 2.76%. NIR increased by 8% due to the impact of higher shareholder returns, the base effect of higher non-life claims due to the 2022 KZN floods and insurance, as well as higher fees due to stronger growth in assets under management. This was partially offset by lower advice and investment fees in wealth management, as clients showed a preference for on-balance sheet deposits in the high interest rate environment. Credit impairments increased off a low base due to the increase in local credit impairment charges, coupled with lower client-specific overlay releases compared to the prior year.
Expenses increased by 12% on the back of an investment in people, brand, and digital and data initiatives, as well as impacts from higher inflation and exchange rates. Nedbank Africa Regions also delivered very strong results, with headline earnings for the cluster up 97% and ROE up to 29%. In our SADC operations, HE was up by over 100% to ZAR 461 million, and the ROE increased to 13.5%. NII growth of 33% was driven by improved margins, while NIR increased by 30% due to unrealized Forex gains in Zimbabwe, which are lower quality and volatile earnings. Partially offset by a higher net monetary loss and slower business activity. Impairments increased by 20%, but the credit loss ratio remained within the through-the-cycle target range.
Our ETI associate investment continued its ongoing recovery with a 75% increase in contribution to headline earnings at ZAR 671 million, benefiting from improved operational performance and the reversal of the ZAR 175 million provision that Nedbank raised in 2022 for the estimated impact on associate income from ETI for the Ghana Sovereign domestic debt restructure. We continue to monitor the potential adverse impact of challenges that continue to face Ecobank Ghana and Ecobank Nigeria. Lastly, the new ETI Group Chief Executive, Jeremy Awori, has now taken full executive responsibility with effect from 1 March 2023, and pleasingly, ETI has now declared dividends in the last two cycles. I now hand back to Mike to reflect on the environment, our targets, and to close.
Thank you, Mike. In closing, as usual, I will provide our outlook for the period ahead, starting with the Nedbank Group economic unit's latest forecasts, and then our updated 2023 short-term guidance. At year-end, we will reflect on our medium and longer-term guidance. Starting with the latest macroeconomic outlook from the Nedbank Group economic unit that informs our guidance to the market. We currently forecast South Africa's GDP to increase by only 0.3% this year, with GDP growth for 2024 and 2025 expected to be only 1% and 1.5% respectively, evidence of the binding constraint that electricity supply, in particular, and slow progress on structural economic reform in general, have on economic growth.
South Africa's inflation is forecast to ease further in the second half of the year, assisted by the high prior year base, weaker domestic demand, and lower global oil, food, and other commodity prices, and average around 5.7% in 2023. Thereafter, inflation is expected to gradually return to around the 4.5% midpoint of the Reserve Bank's target range. We currently expect that the prime lending rate will remain flat, at 11.75% for the rest of the year, before starting a slow decline in 2024. As a result, the prime interest rate is 75 basis points higher than the 11% peak expected at the start of the year, with some upside risk still remaining to this forecast. Conditions in the banking industry are therefore expected to remain challenging.
Credit extension is forecast to slow to just short of 5% by the end of 2023, contained by pressure consumers are already under, as well as the rise in interest rates, slow economic growth, and weak corporate activity in anything that is not related to energy. Turning now to our usual guidance for the short term, to the end of 2023, using our H1 performance and the economic forecasts I have just gone through as a base. Net interest income growth for the full year is now expected to be slightly above mid-teens and above the guidance we provided at the start of the year. We do expect some slowdown from the 18% growth achieved in the first half, as the ongoing endowment run rate benefit is partially offset by slower average advances growth.
The credit loss ratio is expected to decline from the 121 basis points reported in the first half, but remain above the top end of our target range and higher than the guidance we provided at the start of the year. In this difficult and volatile macroeconomic environment, upside risks remain, particularly in consumer collections in RBB and in the NPL workouts in CIB. Non-interest revenue growth guidance remains similar to the guidance provided at the start of the year of mid-single digit growth. Our focus on tight expense management remains in place, and our guidance of mid to upper single digit growth remains intact. Capital ratios are expected to remain well above board target ranges, and our dividends, subject of course to board approval, declared at the lower end of our dividend cover range.
In closing, I trust it is evident from our presentation today that our balance sheet foundations are very strong, and appropriately so, in the current difficult economic environment. We are also progressing well on our strategic delivery, with tangible proof points of how we have delivered value, whether it is through our technology IT build, digital growth, client satisfaction metrics, cost optimization, cross-sell metrics, targeted market share gains, and proactive capital management, or through us making a purposeful impact in the countries where we operate. Our solid performance in H1 provides momentum towards achieving our 2023 targets, with our DHET, NPS, and H1 cost-to-income ratio targets already being achieved, and steady progress demonstrated to meeting our stretching 15% year-end ROE target.
At our AGM in June, we announced that the Nedbank board, supported by a global search firm with strong domestic presence, would commence the process to choose a successor for myself as CEO. This process is now well underway, and further updates will be provided alongside our year-end results in Q1 2024. In conclusion, in this complex and volatile world, our focus at Nedbank will remain on supporting our clients and staff in the difficult economic environment and delivering on our strategy and what we can control. In so doing, striving to meet our stretching targets that create shareholder value in the short, medium, and longer term. Thank you, and we will now proceed to Q&A. Right, it's time for Q&A, Chorus Call and on the webcast.
We are gonna start first on Chorus Call, so if I could ask anybody who wants to type questions on the webcast to get busy with that while we go first to the telephone lines on Chorus Call. Are there any questions?
We do indeed have some questions, sir. The first one is from Kia Knoop of Citi. Please go ahead.
Thanks. Hi, Mike Davis and team. Thank you for the call. A few questions from my side. So you mentioned that the RBB's credit loss ratio is likely to improve in H2 2023. What data points are you seeing in specific products close to year-end that give you comfort around this? And how do you see the H2 RBB CLR specifically progressing relative to the through the cycle range? I recall that the previous guidance was to be within the top half of the 120-175 pip range. How is that going to progress in the H2 relative to that? Secondly, on renewable drawdowns, these have remained largely flat over time.
Can you provide some more information on the bottlenecks that have been faced in converting these renewable energy deals, and how, like, what sort of uptake are you anticipating in drawdowns in 2 H? Thanks.
Okay, thanks. I'm gonna pass some of these around to our ex-com members who are on the call. Clearly, we're not going to give you detail of what's happened post the H1 results, but we can certainly give you a sense as to why we think we are likely to see a slight improvement in RBB's credit loss ratio in H2. Tiko, if I could ask you, Tiko Thomas, the managing executive of RBB, to cover off that question.
Thanks, Mike. Kia, thanks for the question. We have, obviously, since the beginning of the year, put a lot of efforts into the collections world in particular. Heavy, heavy weighting on that. We encouraged from around end of March, April, at the green shoots that we're starting to see coming through, especially with some momentum starting to pick up now, kind of June, July as well. That kind of informs our view of where the direction of travel will be on our CLR for the second half.
Thanks, Tiko. Obviously a reminder that there is generally seasonality in retail credit losses. H1 usually is higher than H2, albeit that that is likely to be less so than usual in this difficult economic environment. On the second question, which is around the bottlenecks in renewable drawdowns, I'm going to ask Anél Bosman, managing executive of our CIB business, to pick that up, please.
Thank you, Mike. On energy, we have now seen the private generation actually starting to have bigger drawdowns than the government program. We do see 20%, more or less 20% increase in that book over the second half of the year, which the majority is private generation on our current advances outlook for the year. The government programs are often delayed, and it's very difficult to give an accurate date of when they will close, even though we are told that it's very close to closing for those we have participated in. Thank you.
Right. Thanks, Anél. Any more questions on Chorus Call?
Yes, sir.
Can I follow up on the call, on my question on the second half, RBB CLR progress relative to the TTC range? Thanks.
Tiko, if you'd like to pick up on that piece as well.
Yeah. We indicated that, it's probably going to travel south, from the high point than is given first.
Yeah. We're not giving explicit guidance with respect-
No.
-to the range, all we are saying is we expect a reduction from the peak at H1. Right.
Thank you very much. The next question is from Charles Russell of SBG Securities. Please go ahead.
Good afternoon, Mike, Mfundo. Mike, thanks for the high-quality presentation as usual. 3 questions, if I may. Firstly, can you draw the link between the positive story on main bank client growth of 11%, the digital innovation and the simplified product stack with the rather low 4% growth in fee and commission income? That's question 1. The second is, if you could maybe just elaborate on your decision not to follow an interest rate hedging strategy, as the peers have all now opted to follow. I have seen slide 46, if you can maybe just elaborate on that. Then the third is: How long do you think the lag is between the emergence of retail credit stress and then corporate credit stress?
Do you expect a, a likely breach of the, the top end of the corporate CL-.
... through the cycle range in the foreseeable future. Thank you.
Okay, thanks, Charles. Again, we, we're gonna parcel those out a little bit. Tiko, if I could come back to you with the 11% growth in main bank and the lower growth in commission and fees, what's underneath that?
Thanks, Charles. Yes, I mean, a big driver of increase in commissions and fees are the price increases that we take annually. We were able to take price increases again this year, albeit at lower levels to previous years, so that would have been a factor in that number. What we've seen is, in that number as well, is a healthy increase in the other drive in the numbers that's in commissions and fees. For instance, our VEST products grew by 30%, and that is reported in that number as well. It would've been a strong driver of the growth in that number as well. There are other lines as well.
On the, on the acquiring side, we've seen strong growth there as well. Yeah, I mean, the fact that we've had underlying main bank growth has been a good driver of what we've seen as an outcome. There is that inference and correlation that we can drive there.
Thanks, Charles, and perhaps just 1 or 2 other little builds on, on that. The 4% growth that you talk about at commissions and fees is at a group level. In the, in the detail, you'll see that that is after the settle of some card costs that were previously in expenses, and we've now set them off against non-interest revenue. In total, non-interest revenue, on commissions and fees on that basis would be growing at about 6%. Actually, even before that, non-interest revenue commission and fees in RBB is growing at just under 7%, and they would be the largest piece of the bank impacted by that set of card expenses.
On the second one, which is the issue around interest rate hedging and how Nedbank looks at a through the cycle economic view of endowment on the one hand versus movements in credit losses on the other hand, I'm gonna ask Mike Davis to pick that up.
Yes. Charles, we've had this conversation before. I mean, I, I think what's important is that what we've looked to do is we have looked to effectively roll out of treasurables or short-dated government stock into effectively long-dated government bonds. We have looked to pick up the benefit of the steep yield curve, and lock in basis, as opposed to run the outsi- the outfight interest rate risk of holding a government bond at a fixed rate. That's been, that's been, you know, very rewarding from a, an NII and NIM perspective. You see that in our NIM articulation in terms of the balance sheet management piece. As we've discussed before, we're very comfortable to run the endowment as a natural hedge against impairments.
It's obviously been very beneficial, over the last 2 years as interest rates have increased, and we continue to do so.
Then the last question was the lag between increases in retail credit losses and how that plays out in wholesale later on in the cycle. In particular, do we currently expect that our wholesale business will reach the top end of its through the cycle target range? I'm gonna ask Anél Bosman to chat to that one.
Thank you, Mike. We usually see the lag between retail and large corporates as one to two years. However, in this economic cycle, we're not sure that that will hold, as corporates are coming out of a stressed environment in any way, and have, have become very cost conscious and leaned during COVID. For the remainder of the year, we believe that our credit loss ratio will be around the middle of our through the cycle range of 15-45 basis points. Some more stress in the system, but not anything like we have experienced two years ago.
All right. Charles, I hope we covered those off. Any other questions or any follow-ups from you, Charles?
Right.
Thank you. The next question is from Harry Butcher of Anchor Stockbrokers. Please go ahead.
Hi, good afternoon, Mike and team. Thanks very much for the presentation. Just to follow up on Kia's question, what do you expect to relieve the pressure on consumers into 2024, where the prime lending rates are seen to be close to 11%, based on your slides? Can you possibly provide a bit more color on the market share gains you currently making in home loans, considering the comments that there's pressure on the low-end consumer, is it across the board? Is it more towards the upper end of that, that market? Thanks.
Okay, thanks. Tiko, if we could come back to you on both of those.
I'll start with the second one, Harry. Yeah, we are starting to see pressure right across the book. I think the early part of the strain that we're seeing in home loans was on lower income clients. You can understand that with the adverse inflation drivers, pressure on rates, et cetera, et cetera. That's where. A lot of that has been the vintage of home loans that we wrote at the bottom of the rate cycle around 2020. That's where we're seeing the most pressure. We are now starting to see it spread across the rest of the book as well. A lot of the work that we're doing is aimed at kind of curing and preempting it right across the book.
Your first question, I missed, Harry, you know, maybe we can pick it up and I can send it to you, unless you want to repeat it quickly?
Yeah, sure. It's just what do you expect to relieve the pressure on consumers into 2024, with the prime lending rate assumed to be close to where it is at the moment?
Yeah.
Just on the home loan, home loans one, was really just where you're gaining market share, I guess, in home loans, from a consumer income perspective.
Yeah. A big source of home loans market share has been our activity back in the mortgage originator space. We're starting to see some good growth, amongst, in that channel. You know, for, for a very long time, and we've spoken about this, we've been out of action in that channel for a long time. Starting to see some good activity there. It's been a good driver of, of market share gains, as well as affordable housing. Affordable housing, we were quite, present in writing good quality business there, and that's been a good boost for us, in, in, in terms of market share gains as well. The pressure we anticipate, and it's gonna be tough into the cycle, I mean, a big part of how we anticipate keeping our shared market gains is just smart origination.
just being more selective about where we write business, and really trying to mix it up in, in terms of where we look to harvest growth and grow the book in our home loans book. We anticipate that the pressure's not gonna go away.
Yeah, Harry, perhaps a little bit of an expansion on, on that. You know, we certainly think in the current environment, absolutely, consumers are going to remain under pressure. Hopefully, in the second half of the year, there will be a little bit of a relief on that pressure from falling inflation, in particular, food, food and energy inflation, to give a little bit of relief. But we expect the improvement in credit losses to be driven by that, plus normal cyclicality, as well as the material improvements we've made in our own collections environment. I think pressure will remain throughout 2024, and probably only begin to show meaningful relief in the second half of 2024 and into 2025, as interest rates begin to fall, if our current interest rate projections are correct.
Great. Thank you.
Right. Can we keep going on the Chorus call?
Of course, sir. The last question we have at the moment is from Ross Riechel of Investec.
Good afternoon, everyone. Thanks very much for the call. Just two from me. The first is on net interest margin. The guidance for stable NIM into H2 versus H1. Just wondering, you know, with the movements in average rates and, and your gearing to that, what are the other, the other elements that are maybe lowering that lowering that NIM? Would have, I would've expected endowment effect to drive accretion there. Secondly, on the credit loss ratio guidance, your reference to risks, upside risks to that guidance with regard to RBB collections, just wondering, I mean, is that a, sort of a general comment on understandably not knowing how that might play out? Or, or is it with regard to maybe the macro unfolding differently to your assumption?
Okay. On the NIM, Mike Davis, if I could ask you to pick that up.
Yeah. Ross, what we expect to happen obviously is the run rate benefits of endowment to push NIM up. We would expect that the ongoing pricing pressure we, we see with regards to good quality funding and good quality advances, together with the fact that we would expect to continue to see high levels of secured lending versus unsecured lending on a relative basis. As a result, we still see some negative mix and pricing pressure that will offset that positive run rate endowment impact.
Then on collections, you know, I think we certainly have made material improvements in our collections environment during the course of this year, and we would expect that to continue to play out, as Tiko said earlier. The reference is much more around the environmental, you know, the external risk in that space at the moment.
Great.
Right.
Thanks very much.
Anything else on Chorus Call? Otherwise, I'm gonna go to the web.
We do have another question, sir. It is from James Stark of RMB Morgan Stanley.
Hi, Mike and team. Another Mike. Thanks for the opportunity. Just my, my two questions really relating to ROE. If we look at the divisional ROE, and particularly wealth and NAR, in our region, you know, it's pretty high at the moment, and how should we think about that evolving into the second half and on into 2024? That's the first one. Then the second one, if I look at your medium-term ROE target of 17%, I mean, it's clearly a numerator and a denominator story in the journey from here to there. You've already done the buyback. Your dividend guidance is really, you know, kind of at the range. I mean, can you get there to 17% without doing more than what you're currently guiding for on, on the denominator? Thank you.
Okay, thanks. I'm gonna pass both of those over to Mike Davis.
Yeah. I think, I mean, the ROEs are high within both NAR and Wealth at the half year. In terms of some of the group-wide guidance, you'll be able to pick up there that some of that is gonna play out in those two particular clusters. As a result, I would expect the ROEs to drift slightly down from current levels. You can pick that up in the, in the group-wide guidance. Then with regards to effectively hitting both our short-term and medium-term ROE targets, I mean, our big focus at the moment is to get to 15% at the end of this year. Then, you know, we've got a booklet slide, which we'll spend time with all of our investors during the roadshows with regards to how we unpack getting to the 17%....
You know, I think when you think about surplus capital and whether we do anything in the denominator to achieve 17%, that'll be driven by a decision as to the capital adequacy of the organization. In other words, we're not simply going to offload capital to deliver the 17%. However, if we structurally size a further capital buffer that we, we, we think warrants, you know, giving back to shareholders, that may be something we do in due course. At the moment, the way we think of capital, capital surpluses, is, first of all, effectively, we want to be above the top end of the target range at the moment, given the macroeconomic environment, given the fact that we think that consumers are gonna remain in a, in a, in a tough space through to 2024.
We, we'd be happy to operate outside the top end of the 12%, top end guidance. Secondly, we've spoken about, you know, continuing to support divis paid at the lower end of the times cover, rather than in the middle of the range. We wouldn't mind a bit of capital, you know, to the extent that we identify any bolt-on investment. Again, to the extent that we give anything back by way, by way of a special divi or further buyback, will be based on structural sizing.
Of course, our preferred use of capital always is in support of our clients to grow their businesses, and the very large opportunity ahead of us in that, in that energy environment. We certainly want to be an active participant in that.
Thank you.
Right. Anything else on the telephone lines?
We have no further questions on the queue, sir.
Okay. If we can move across to the web, at the moment, there are three questions posted on the web. First, from Mr. Steyn , I believe, a private investor: How much did you provide for commercial property bad debts? Can you specify what amount relates to JSE-listed companies? Again, I'm gonna ask Anél Bosman in our CIB business, that looks after our commercial property portfolio, to answer that.
Thanks, Mike. I'm going to refer you to page 112 and 113 of the interim analyst booklet. In there, we show that the total impairments for property finance is ZAR 224 million. Then with the breakdown on not listed versus unlisted, but in the different stages, with stage three, nearly ZAR 200 million. I think you can make your own conclusions in terms of how the impairments in property was taken.
Thanks, Anél. Then we've got two questions, I think, from Matthew Pounsett at Laurium Capital . The first one, the guidance of flat NIMS for the second half versus that of the first half looks muted in light of the continued rate increases. What is offsetting the positive endowment impact here? Mike, you've partially answered that earlier, but is there anything else you'd like to add?
No, I think those are the... It's pricing and it's mix. Pricing on both advances and deposits, so squeeze for good quality deposits and advances, and ongoing mix adverse impacts as a result of writing more secured versus unsecured, which comes with thinner margins and/or effectively... we answered in the first, first piece.
The second question is also very similar to the one that James Stark asked earlier: Does management envisage getting back into the CET1 ratio board guidance of 11%-12% through balance sheet growth or structural programs such as buyback and dividends? I think Mike Davis gave his answer that we think in the current volatile and difficult macro, we want to remain above the 12%. We want to support our clients in organic growth. We want to have sufficient capital for any bolt-on acquisitions that may be synergistic to our current operations. Over time, we will continue to look at other capital management activities. Right. Hopefully, we've dealt with all the questions on Chorus Call and on the web. Are there any others? No? I think all that remains-
No further questions online.
All that remains is to thank you for your participation today, and, travel home safely, those of you who are traveling. I'm sure we will catch many of you in our results roadshow coming up shortly. Thank you.