Business

Nedbank profit beats expectations

Renee Bonorchis

Nedbank Group reported a full-year profit that was higher than expected as revenue increased and bad debt growth slowed down.

Nedbank. (Gallo)

Nedbank Group, the South African lender controlled by Old Mutual, reported full-year profit that beat analyst estimates as revenue advanced and bad debts increased at a slower pace.

Net income rose to R8.64-billion ($789 million), from R7.45-billion in 2012, the Johannesburg-based company said in a statement on Monday. Earnings per share excluding one-time items climbed 15% to 18.84 rand, beating the R17.89 mean estimate of 15 analysts surveyed by Bloomberg.

The increase in profit was driven by "good revenue growth, impairments increasing at a slower rate than net interest income and disciplined expense management," Nedbank said in the statement.

Nedbank, South Africa’s fourth-largest lender by assets, started expanding outside the country’s biggest cities four years ago to win more clients in the low-income market. The bank expects advances to grow by 5% to 9% this year, while the credit-loss ratio should be within the 80 to 120 basis points range.

The lender's full-year dividend climbed 19% to R8.95 rand. Nedbank said it expects net interest revenue, excluding fair-value adjustments, to rise 5% to 9% this year. – Bloomberg

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