R198m Ecobank profit lifts Nedbank
Nedbank said yesterday that it had produced a strong performance for the first quarter, underpinned by the return to profitability by its subsidiary. The news lifted Nedbank’s share price 5.4percent to R315.82 a share, the highest level since at least May 1997, according to data. The share closed at R307 on the JSE yesterday. Nedbank’s share price has risen more than 42percent in the past six months.
Nedbank expected ETI to continue with its progress by reporting R240million in its half year results compared to R1.06billion reported in the half-year results in 2017.
Nedbank owns an around 16percent stake in the leading pan-African bank, with operations in 36 countries across the continent.
While business and consumer confidence levels had improved, the beneficial impact thereof in the group's performance to date had largely been limited to improved trading and market-related activities. “Credit demand and transactional activity has remained subdued, but an improvement is expected from the second half of 2018,” it said.
The group’s net interest income grew at low- to mid-single digit levels during the quarter. “The net interest margin for the period widened ahead of the full-year 2017 level of 3.62percent, led by advances and funding mix benefits as well as improved asset pricing,” it said.
The group’s credit loss ratio now reported under IFRS 9, increased in line with expectations and was slightly below the lower end of its 60 to 100 basis points through the cycle target range. It said its non-interest revenue grew just above mid-single digit levels. “Commission and fee growth reflects subdued levels of client transactional activity as well as accounting impacts from IFRS 15, offset by continued cross-sell and gains in clients across our retail and wholesale businesses,” the group said.
Trading and private equity income grew strongly, while insurance income increased off a low base in the first quarter of 2017 in line with expectations.
- BUSINESS REPORT