Shares in South Africa's Nedbank jumped 7 percent on Monday after the lender reported rises in income from interest, fees and commissions and its associate Ecobank returned to profit in the first half of the year.
Nedbank, a unit of Anglo-South African financial conglomerate Old Mutual, reported its lowest half-year earnings growth in six years but said it was dragged down by a loss at Ecobank in the fourth quarter of last year.
Ecobank's first-half profit will be included in Nedbank's second-half results. The lender owns about 20 percent of Ecobank, whose operations in more than 30 African countries had been exposed to economies weighed down by the collapse in commodity prices. Ecobank reported a $204 million first-half pretax profit.
Nedbank maintained its guidance that growth in headline earnings per share this year would be lower than last year.
"Our guidance for organic growth in diluted headline earnings per share for 2016 remains unchanged," Nedbank's CEO Mike Brown told Reuters by phone. "We certainly expect that Ecobank losses are behind us rather than in front of us."
Nedbank, South Africa's fourth biggest lender by value, said diluted headline earnings per share (EPS) rose 1.6 percent to 1,119 cents in the six months to June 30, the lowest growth since 2010.
Headline EPS is the main profit measure in South Africa that strips out certain one-off items. Excluding the impact of Ecobank's fourth-quarter loss of 600 million rand, headline EPS would have grown about 20 percent.
Shares in Nedbank rose more than 7 percent to 213.70 rand, after briefly touching 215.56, their highest since November, and outpacing a 0.3 percent gain in the blue-chip JSE Top-40 index.
Nedbank, along with rivals, has struggled to increase lending as slowing economic growth in many African markets tempers demand from corporate clients and rising interest rates at home hit consumption by retail customers. However, it saw strong growth in interest on existing loans and revenue from fees and commissions in the first half.
However, Brown said in the telephone interview that full-year headline EPS growth would be lower than the 8.5 percent growth notched up in 2015.