Nedbank Group beat expectations with a 9% increase in annual profit on Monday, helped by a fall in bad debts, and said it was well placed for growth in the coming year.
Nedbank, the South African bank that HSBC dropped a takeover bid for last year, said diluted headline EPS totalled 1 069 cents in the year to end-December, up from 983 cents a year earlier.
That compares with a median estimate of 1 039 cents in a poll of 11 analysts by Thomson Reuters.
Headline earnings, the main measure of profit in South Africa, exclude certain one-time items.
South Africa’s fourth-largest bank, like its rivals, was lacerated by bad debts in 2009, after a recession slashed more than a million jobs and left many consumers with ballooning household debt.
With consumer demand still weak and many corporate earnings under pressure, South African banks are increasingly looking to cut costs to offset lean revenue.
Nedbank, majority owned by insurer Old Mutual, has been focused on righting its retail unit, which has been hit by a flood of bad mortgages. The unit returned to profit in 2010 after a loss a year earlier.
Net interest income, the measure of earnings from lending, totalled R16,6-billion compared with R16,3-billion a year earlier.
Bad debts costs came to R6,2-billion versus R6,6-billion in the previous year.
Shares of Nedbank are down 1,8% so far this year, slightly outperforming a 0,6% rise in Johannesburg’s Top-40 index. — Reuters