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Nedbank Reports 20% Profit Gain on Luring More Customers

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Feb. 25 (Bloomberg) -- Nedbank Group Ltd., the South African bank controlled by Old Mutual Plc, said full-year profit climbed 20 percent after winning more than half a million new customers.

Net income rose to 7.8 billion rand ($878 million), from 6.5 billion rand in 2011, the Johannesburg-based lender said in a statement today. Earnings per share excluding one-time items climbed 21 percent to 16.46 rand, beating the 16.21-rand mean estimate of 17 analysts surveyed by Bloomberg.

“This was a solid set of results in a difficult trading environment,” Nedbank Chief Executive Officer Mike Brown said in an interview. Bad debts fell 2.5 percent to 5.2 billion rand after an improvement in the credit-loss ratio, he said.

Nedbank, South Africa’s fourth-largest lender by assets, combined its private banking operations into one unit and introduced mobile-banking applications to attract customers. The bank also expanded outside South Africa’s biggest cities to increase its share of the low-income market, which helped create 450 jobs and attract 655,000 new clients last year.

The lender, which will ensure executive bonuses are “appropriately restrained,” plans to exercise its right to take a 20 percent stake in Togo’s Ecobank Transnational Inc. in November, according to Brown. Ecobank has operations in more African countries than any other lender.

Nedbank rose 0.8 percent to 189.50 rand in Johannesburg. The bank boosted its full-year dividend more than 24 percent to 7.52 rand a share.

Nedbank will “probably” sell bonds this year to help meet stricter Basel III capital rules, said Brown, without giving further details. The lender will continue to issue senior unsecured debt to lengthen its funding profile, he said.

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

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