S.Africa's Nedbank lifts first-half profit, helped by fee income

by Reuters 0

Nedbank headline earnings up 14%

South Africa’s fourth-largest bank Nedbank reported a 14.1 percent increase in first-half profit on Tuesday as growth in fee income helped offset muted growth in lending.

[DATA NED:Nedbank Ltd], majority-owned by Anglo-South African insurer Old Mutual, said headline earnings per share (EPS) rose to 1,101 cents in the six months to the end of June from 965 cents a year earlier.

Headline EPS is the main profit measure in South Africa that strips out certain one-off items.

Non-interest revenue, or income from transaction and deposit fees, rose 10.2 percent to 10.4 billion rand ($823 million).

Net-interest income, a closely watched measure of how much money banks make from their loans, grew marginally, helped by corporate credit demand.

Lending to companies is increasingly becoming the mainstay for banks in Africa’s most advanced economy as they pull back from high margin but risky unsecured credit, which relies solely on a customer’s promise to pay it back, due to dangerously high personal debt levels.

But an electricity crisis at home and the impact of weaker commodity prices in nearby sub-Saharan African countries could temper corporate credit growth.