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Johannesburg - Nedbank Group [JSE:NED], the South African lender controlled by Old Mutual [JSE:OML], said full-year profit gained 9.4% after the retail unit boosted customer numbers and the bank controlled costs.
Net income rose to R10.72bn ($688m), from R9.8bn in 2014, the Johannesburg-based company said in a statement on Wednesday. Earnings per share excluding one-time items climbed to R22.42, slightly ahead of the R22.39 median estimate of 11 analysts surveyed by Bloomberg.
The shares climbed as much as 2.1% and rose 1.2% to R188.10 as of 09:17 in Johannesburg, the highest since February 26. The stock was trading at R189.98 at 11:00. The seven-member banks index climbed 1.6%.
Nedbank is seeking growth in the rest of the continent as its home market in South Africa struggles to avoid a recession and a credit-rating downgrade to junk. The lender, which has slipped to fifth-largest bank by market value in South Africa after being overtaken by Investec, plans to expand in East Africa and use its stake in Togo’s Ecobank Transnational to benefit from faster growth in sub-Saharan Africa. Retail clients increased 8.5% to 2.7 million last year, the bank said.
“We currently forecast that growth in diluted headline earnings per share for 2016 will be lower than the growth we achieved in 2015 and below our medium- to long-term target,” Mike Brown, chief executive officer of Nedbank, said in the statement.
“Rising interest rates will increase borrowing costs and dampen consumer credit demand. Credit defaults are also expected to increase.”
This year, Nedbank said it will increase its stake in Mozambique’s Banco Unico to 50% plus one share at a cost of about R178.4m in the first half.
