South African-based Nedbank’s headline earnings in the year to end-December rose 14.5 percent to 13.5 billion rand thanks to the turnaround of its Togo-based associate company, Ecobank Transnational Incorporated (ETI).
The Chief Executive Officer of Nedbank, Michael Brown said “in 2018, Nedbank Group seamlessly concluded the process of managed separation from Old Mutual and delivered a resilient financial performance, boosted by the ongoing turnaround in our share of associate income from ETI”.
ETI contributed a headline profit of 375 million rand, from a loss of 975 million rand in 2017. Nedbank bought a 20 percent stake in the pan-African lender in 2014. Excluding that investment, Nedbank’s headline earnings grew at a more modest pace of 2.8 percent.
Nedbank said its revenues grew by 6 percent and for the first time its total assets crossed the 1 trillion rand mark. This helped it lift its total dividend for the year by 10.1 percent to 14.15 rand per share. The lender’s return on equity, excluding goodwill, improved from 16.4 percent to 17.9 percent.
However, impairments increased 11.6 percent to 3.7 billion rand and the group’s credit loss ratio rose four basis points to 0.53 percent as advances in the retail and business banking unit grew faster than advances from the corporate and investment banking cluster.
Brown said Nedbank grew its market share of main-banked clients across all its business clusters, and this underpinned “solid” non-interest revenue growth. He also said the trading environment in Nedbank’s home market would probably improve.
Nedbank noted that economic conditions in West Africa were improving, and its investment in ETI “should continue to support Nedbank’s earnings growth”.