27th Oct 2014 07:20
LONDON (Alliance News) - Old Mutual PLC's South African banking subsidiary Nedbank Group Ltd Monday said it is on track to meet its full-year guidance, after reporting high net interest and non-net interest income in the first nine months of the year.
In a statement, Nedbank said it remains well positioned to meet its full-year guidance for growth in organic diluted headline earnings per share of greater than nominal GDP growth in 2014.
Its net interest income for the nine months ended September 30 grew by 8.4% to SAR17.04 billion, from SAR15.73 billion a year earlier, underpinned by average interest-earning banking assets growth of 9.9%, up from 6.5% growth.
Its net interest margin narrowed to 3.53%, from 3.58%, with the increase in endowment income offset by asset mix and pricing changes as lower margin wholesale advances grew faster than higher yielding retail advances.
Its credit loss ratio improved to 0.77%, from 1.15% a year earlier and 0.83% at the end of June this year, reflecting asset mix changes, and credit risk management policies including early actions taken to reduce unsecured lending and its selective origination approach of the last few years.
Non-interest revenue increased 2.4% to SAR14.51 billion, driven by commission and fee income growth of 3.4%, a decrease in insurance income of 3.5%; trading income growth of 1.1% and negative fair-value adjustments of SAR64 million.
Nedbank's common-equity tier 1 capital ratio stood at 11.9% at the end of the third quarter, down from 21.1% at the end of June, but still comfortably within its target range. Its tier 1 capital ration was 12.8%, down from 13.1% at the end of June, and its total capital ratio was 14.6%, down from 15.0%.
By Steve McGrath; [email protected]; @stevemcgrath1
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