Johannesburg - Nedbank Group [JSE:NED], South Africa's
fourth-largest lender, undershot market expectations with a 19% rise in
full-year earnings on Monday, as growth in profit from loans was thin.
The bank majority owned by insurer Old Mutual [JSE:OML] said
diluted headline earnings per share totalled 1,595 cents in the year to end-December,
from 1,340 cents a year earlier.
A Thomson Reuters SmartEstimate had forecast earnings rising
to 1,619 cents.
The lender said earlier this month full-year earnings would
rise by between 18%-23%.
Net interest income, the measure of earnings from lending,
rose 9.1% to R19.68bn, while non-interest revenue gained 12.4% to R17.32bn.
Impairment charges shrunk to R5.19bn from R5.33bn in the
previous year. The lender hiked its dividend payout by over 24% to 752 cents
per share. Analysts had anticipated a lower 749 cents.
Nedbank's retail unit incurred losses from the recession in
2009 that had left many borrowers unable to service mortgage payments but
returned to profitability in 2010.
The bank has since focused on improving its retail business
and boosting fees from transactions, to offset relatively muted demand for
The $10.9bn bank's bigger competitor Absa Group [JSE:ASA]
reported a 9% drop in full-year earnings earlier this month, hit by souring
Nedbank's shares are up flat so far this year, compared with
a 1% rise by the Top 40 - (Tradeable) [JSE:J200] index.
Nedbank shares rose 2.2% to R192.11on Monday morning, helped by a better-than-expected dividend payout.