Nedbank posts solid first-quarter results

Nedbank, South Africa’s fourth-largest bank, reported a 16% jump in non-interest revenue in the first quarter, as part of its strategy to lessen its reliance on lending and improve bad debts.

In a trading update on Friday, the bank outlined solid growth in other business lines, but left its full-year outlook unchanged.

Nedbank, like its rivals, was hit hard by bad debts in 2009, after a recession slashed more than a million jobs and left many consumers with ballooning household debt.

Nedbank has since outlined a strategy to turnaround its retail unit, lower bad debts and increase the money it makes from areas other than loans.

Nedbank said its non-interest revenue rose 16,4% to R3,5-billion in the three months to end-March, compared with R3-billion a year earlier.

Growth in clients and higher transactions in electronic banking helped its fees and commissions, it said.

Net interest income, a measure of earnings from lending, rose by nearly 6% to R4,3-billion.

It did not give numbers for net profit or headline earnings, the main measure of profit in South Africa.

The bank said its credit loss ratio, a measure of bad debts, improved to 1,15% of its total loan book, compared with 1,46% a year earlier.

Nedbank, which is majority owned by insurance firm Old Mutual, is the South African bank that HSBC dropped a takeover bid for last year.

Shares of Nedbank are up about 8% so far this year, outperforming a slight decline in the top-40 index of blue-chips. - Reuters

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