Mike Brown, Nedbank CEO

Banking struggles: Nedbank sees asset growth expanding more slowly than SA GDP

By Vernon Wessels

(Bloomberg) – Nedbank Group Ltd. forecast that interest-earning banking assets will increase at a rate below that of nominal growth in South Africa’s gross domestic product, after earlier predicting it will be in line with the economy’s expansion.

Mike Brown, Nedbank CEO
Nedbank CEO Mike Brown speaks during an interview at the 2016 Bloomberg Africa Business and Economic Summit in Cape Town. Photographer: Waldo Swiegers/Bloomberg

The lender’s credit-loss ratio, which rose 6 basis points to 53 basis points, will also increase slightly above the level achieved in 2017 although it will remain below its 60-100 basis-point target range, Johannesburg-based Nedbank said in a statement on Tuesday.

First-half earnings per share excluding one-time items rose 26 percent to 13.61 rand, boosted by rising profit at Ecobank Transnational Inc., the Lome, Togo-based lender in which Nedbank owns a 20 percent stake. South Africa’s central bank expects GDP to expand 1.2 percent in 2018.

“Slow revenue growth and a gradual increase in impairments were offset by good cost management,” Nedbank Chief Executive Officer Mike Brown said in the statement. Total assets exceeded R1 trillion ($75 billion) for the first time.

Nedbank’s stock has gained 3.2 percent this year, the best performer in the six-member FTSE/JSE Africa Banks Index, which is down 2.6 percent.

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