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Johannesburg - Nedbank Group on Wednesday increased its interim dividend by seven percent to 610 cents per share for the six months ended 30 June despite a challenging political and economic environment.

Nedbank said strategies implemented over the past few years in preparation for a tougher economic environment had positioned the group well for the recessionary conditions and the sovereign-credit-ratings downgrade that followed President Jacob Zuma’s cabinet reshuffle at the end of March.

Chief executive Mike Brown said the group produced a resilient performance in a macro environment that had proved to be more challenging than expected.

Brown said the South African banking system remained sound, liquid and well capitalised despite the many challenges faced by the economy.

"Our managed operations produced headline earnings growth of 6.7 percent to R6,433 billion from R6,030 billion in June 2016, driven by slower revenue growth, reduced impairments and good cost management," Brown said. 

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"In an environment of slower revenue growth, and as we accelerate the delivery of our digital products, we are intensifying our focus on cost-efficiencies to create investment capacity and to improve efficiency ratios. We aim to create a more agile, competitive and digital Nedbank."

Net interest income for the interim period increased by three percent to R12.472 billion, while operating income rose by 6.8 percent to R20.722 billion, up from R19.401 billion in 2016, and profit from operations jumped 14.6 percent to R7.680 billion.

However, Nedbank revised its guidance on financial performance for the full year 2017 in light of the weak economic outlook in South Africa.