South Africa’s fourth-biggest bank, Nedbank, lowered its 2009 earnings outlook on Wednesday after reporting a slide in first-half profit as bad debts surged at its corporate and retail units.
Nedbank, the second of South Africa’s big four banks to report results, said headline earnings per share for the six months to end June fell 34,1% to 474 cents, in line with its own forecast of a 32% to 37% fall.
The bank, majority-owned by insurer Old Mutual, said the impairment charge on loans and advances stood at R3,43-million for the period compared with R1,86-million the previous corresponding period.
It forecast an 18% to 38% drop to 1 401 cents for diluted headline EPS for 2009.
South Africa is battling its first recession in 17 years and local banks have taken a knock from rising defaults in their corporate and retail businesses.
Rival bank Absa, the country’s biggest mortgage lender, reported a 39% slide in first-half EPS on Monday and said defaults in the period more than doubled. — Reuters