Nedbank Q3 loan income up 8.4%

JOHANNESBURG (Reuters) – South Africa's fourth-largest lender, Nedbank, posted an 8.4 percent rise in loan income for the first three quarters of the year after writing more loans to companies, the bank said on Monday.

Nedbank, which earlier this month took a 20 percent stake in pan-African lender Ecobank to expand its continental reach, said earnings from loans rose to 17 billion rand ($1.55 billion).

The bank, which is majority owned by London-listed insurer Old Mutual, increased total advances by nearly 7 percent to 608.7 billion rand in the nine months to end-September.

Its non-interest revenue, or income from transaction activity, insurance and trading, increased at a slower 2.4 percent to 14.5 billion rand.

Nedbank said its credit loss ratio, which measures bad debt costs as a proportion of total loans, improved to 0.77 percent from 1.15 percent a year ago partly as a result of the bank reducing its exposure to unsecured lending.

The central bank had to step in August after the collapse of unsecured lender African Bank, whose implosion under a mountain of defaulted loans sent ripples through the financial sector in Africa's most advanced economy.

Nedbank shares are up more than 5 percent this year, but are lagging an 11 percent increase in Johannesburg's banking index.

($1 = 10.9385 South African rand)

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