Nedbank’s Income Rises 9.2% in Third Quarter, Bad Debts Fall

Oct. 29 (Bloomberg) -- Nedbank Group Ltd., the South African lender controlled by Old Mutual Plc, said income rose in the third quarter while bad debt levels fell.

Net interest income increased 9.2 percent to 14.52 billion rand ($1.7 billion), the Johannesburg-based lender said today in a trading update. Non-interest revenue gained 14 percent to 12.4 billion rand, while the bank reported a credit-loss ratio of 1.03 percent, compared with 1.13 percent a year earlier.

“The group is still on track to achieve its earnings growth target in 2012, notwithstanding the more challenging economic environment,” Mike Brown, chief executive officer, said in the statement. “Our balance sheet remains well capitalized and liquid.”

Nedbank, South Africa’s fourth-largest lender by assets, is boosting lending to win a bigger share of South Africa’s consumer market from rivals such as Standard Bank Group Ltd. and Barclays Plc’s Absa Group Ltd. During the past year, the South African economy has slowed and mining was hurt by labor action.

“It’s still business as usual with our mining clients,” Brown said in an interview on Oct. 24.

The lender’s stated profit target is to achieve growth in diluted earnings per share, excluding one-time items, at the same rate as gross domestic product plus the consumer price index in percent terms and then an additional 5 percent. South Africa’s GDP was forecast at 2.5 percent by National Treasury while the most recent CPI figure was 5.5 percent.

“Given the prevailing economic slowdown and uncertainty combined with the effects of wage-related strike actions, the group remains cautious on its outlook,” Nedbank said in the statement.

Nedbank rose as much as 1.2 percent and was trading 0.4 percent higher at 181.88 rand as of 1:25 p.m. in Johannesburg.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net