Nedbank profit swells 18% in first half

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Renee Bonorchis

First-half profit at Nedbank rose 18 percent after bad debts declined and net interest income increased, the lender controlled by Old Mutual said yesterday.

Headline earnings climbed to R4.6 billion from R3.91bn a year earlier. Diluted headline earnings a share rose 16.1 percent to R9.65, as impairments fell by almost 30 percent.

Earnings were above expectations, as was the “sharp non-performing loan decline in retail, especially personal loans and mortgages”, Patrice Rassou, the head of equities at Sanlam Investment Management, said yesterday. There was “good growth in client numbers, too, and investment banking”.

Nedbank wants to grow in Africa through an alliance with Togo-based Ecobank Transnational and the purchase of a stake in Mozambique’s Banco Unico. The lender would make a decision on whether to take up its rights to a 20 percent stake in Ecobank by November 25, chief executive Mike Brown said yesterday. Nedbank would also contractually boost its stake in Banco Unico to as much as 70 percent within three years, up from 36.4 percent now.

“In a volatile and slowing economic environment our full-year guidance for growth in organic diluted headline earnings a share of greater than the growth in nominal gross domestic product remains unchanged,” Brown said.

Nedbank has until the end of November to convert the $285 million (R3bn) loan it made to Ecobank in 2011 into an equity holding and increase the stake to as much as 20 percent.

The bank proposed a first-half dividend of R4.60. Shares in the nation’s fourth-largest lender by assets rose 0.92 percent to R240.10 yesterday. – Bloomberg


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