South Africa's Nedbank H1 profit up 13 pct on fee income boost

Tue Aug 6, 2013 2:23am EDT

Related Topics

* Non-interest revenue up 15.4 pct

* Net interest income up 6.9 pct

* Shares down 3.5 pct this year

JOHANNESBURG, Aug 6 (Reuters) - Nedbank Group, the South African bank majority owned by insurer Old Mutual, posted a 13 percent rise in first-half profit on Tuesday, boosted by strong growth in income from fees.

Diluted headline earnings per share rose to 831 cents in the six months to end-June, up from 738 cents a year earlier. Headline EPS, which exclude certain one-time items, is the main gauge of profit in South Africa.

Nedbank, South Africa's fourth-largest lender, has turned around its once-ailing retail unit, after being hit by losses following a 2009 recession and has focused on building up income from fees and commissions.

Non-interest revenue rose 15 percent to 9.5 billion rand ($963 million) in the six months to end-June, while net interest income, a measure of earnings from lending, increased 7 percent to 10.3 billion rand.

Impairments, or bad debt costs, increased by 22 percent to 3.3 billion rand.

The bank also declared an interim dividend of 390 cents, up nearly 15 percent from the previous year.

While focused on southern Africa, Nedbank is also in a strategic partnership with pan-African lender Ecobank Transnational that exposes it to dozens of other African countries.

Last week bigger rival Barclays Africa Group, formerly known as Absa, posted an 8 percent increase in profit for the first half, while industry leader Standard Bank is scheduled to unveil its performance next week.

Niche lender African Bank flagged on Monday earnings from its main banking unit were likely to worsen in the second half. The mass-market lender also said it would raise $406 million in a rights issue to strengthen its balance sheet.

Nedbank's shares have dropped 3.5 percent so far this year, outperforming Johannesburg's banks index, which has lost 5.3 percent.

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