|
|
South Africa: Nedbank Earnings Up Six Percent on Corporate Trade
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
Business Day (Johannesburg)
7 August 2008
Posted to the web 7 August 2008
Edward West and Renée Bonorchis
Johannesburg
BANKING group Nedbank toughed out the weaker economy in the six months to June, with its corporate banking section lifting the group's headline earnings 6,8% to 719c per share.
SA's weaker economy was reflected in higher impairment charges in the bank's retail banking operation, and on private equity valuations because of movements in both the equity and property markets.
However, a strong showing in corporate banking lifted headline earnings 6,1% to R2,94bn from R2,7bn.
Earnings also benefited from income of R637m on the disposal of the group's shares in Visa.
Nedbank Corporate's core banking activities generated headline earnings growth of 30,6% to R1,51bn. The interim dividend was held at 310c a share.
CEO Tom Boardman said rising retail impairments were a concern, "but we're not seeing the write-downs international banks have seen".
Bloomberg reported that Boardman, who joined the bank in 2003, would name a successor by the end of the year to remove uncertainty about his retirement . His contract term comes to an end in February 2010.
The impairment charge to the income statement rose 86,4% to R1,89bn when compared with June last year, resulting in the credit loss ratio increasing to 0,96% from 0,62% in the previous corresponding period .
Wholesale banking operations benefited from favourable trading conditions and good client volumes.
Net interest income grew 21,2% to R7,96bn driven mainly by the 22,9% growth in average interest-earning banking assets.
To manage the business through the high interest rate cycle, Nedbank was strengthening its risk and collection processes, controlling cost growth and improving capital ratios.
"We continue to focus on and invest in areas with medium- to long-term growth potential and capitalise on the opportunities created by more volatile market conditions," the group said .
"We're not cutting back on any expansion. We're proceeding as planned. Collections have also needed to be beefed up, so the head count has grown," Boardman said .
|
Prospects for the second half would be influenced by slowing economic growth and retail advances, corporate banking advances remaining resilient, and business banking advances starting to slow. Retail credit loss ratios were expected to stabilise, unless market conditions deteriorated further.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
