5th Aug 2014 08:43
LONDON (Alliance News) - Nedbank Group Ltd, the majority-owned South African banking subsidiary of Old Mutual PLC, Tuesday reported a 17% increase in first-half pretax profit, amid higher net interest income and lower impairments for loans and advances.
Nedbank, which is 52% owned by Old Mutual, increased its interim dividend by 18% to 460 cents.
In a statement, Nedbank said it made a ZAR6.41 billion pretax profit in the six months ended June 30, compared with ZAR5.46 billion in the corresponding period last year. Net interest income increased to ZAR11.26 billion from ZAR10.31 billion, which, combined with a fall in impairment charges on loans and advances to ZAR2.33 billion from ZAR3.33 billion, led to an increase in income from lending activities. However, non-interest revenue fell to ZAR9.48 billion from ZAR9.54 billion. Operating expenses increased to ZAR11.71 billion from ZAR10.75 billion.
"This performance was underpinned by net interest income growth of 9.3% and our focus on selective asset origination and excellent risk management enabled the credit loss ratio to improve from a high base in the prior period to 83 basis points," Nedbank Chief Executive Mike Brown said in a statement.
"In line with our commitment to sustainable banking practices, we maintained our transactional banking fees at 2013 levels, proactively reduced our personal-loans book size and associated credit life pricing with improved benefits. These actions together with lower transactional activity in an environment of low GDP growth, and a high 2013 base, gave rise to lower levels of non-interest revenue," Brown said.
Old Mutual shares were Tuesday quoted up 2.0% at 198.10 pence.
By Samuel Agini; [email protected]; @samuelagini
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