Headline earnings increased 15.9 per cent to 8.6 million rand from 2012: 7.4 million rand in 2012, and diluted headline earnings per share were also up 15 per cent to 1,829 cents from 1,590 cents in the previous year.
“Nedbank's growing franchise, together with the progress made with our strategic focus areas, has enabled the group once again to meet its target for growth in diluted headline earnings per share,” [DATA NBKP:Nedbank] said in a statement.
“In a challenging environment the group delivered a strong performance across a broad front, which resulted in improvements in both returns on assets and returns on equity.”
The Nedbank group is a South African-based financial services provider with clients in Africa, Europe, the Americas and Asia.
Non-interest revenue grew 11.8 per cent to 19.3 million rand from 17.3 million rand in 2012, from a number of factors, including commission and fee income, which increased strongly by 11.8 per cent to 14 million rand from 12.5 million rand in 2012.
Insurance income growth of 13.7 per cent to 1.9 million rand from 1.6 million rand, and trading income, which increased 4.1 per cent to 2.5 million rand from 2.4 million rand, also contributed to the growth in non-interest revenue.
Operating expenses however grew 9.2 per cent to 22.3 million rand from 20.4 million rand in 2012. Profit from operations was however recorded at 9.4 million rand from 8.6 million rand. Nedbank’s full-year dividend per share was up 19 per cent to 895 cents.
“The group benefited from the diversified earnings streams from our clusters. Stronger earnings growth rates were achieved by our wholesale clusters, while earnings growth in Nedbank Retail and Nedbank Business Banking was impacted by higher impairments and continued investment for growth,” the group explained.
Year-end headline earnings for Nedbank Capital increased from 1.4 million rand in 2012 to 1.7 million rand and Nedbank Corporate earnings were recorded at 2.2 million rand from 1.8 million rand in 2012.
Nedbank Business Banking and Nedbank Retail however declined in earnings, but the remainder of the group’s segments continued sustained growth.
“Growth in household credit demand is unlikely to improve in 2014 while employment conditions remain poor, real income constrained and consumer debt levels high,” said Nedbank.
“Growth across most retail advances categories will continue to be muted and consumer credit risks are likely to increase. The rate and extent of further interest rate increases will impact the ability of consumers to service their debt.”