South Africa’s Nedbank Profits To Soar 18%

NEDBANK

VENTURES AFRICA – Nedbank’s headline earnings per share for the year ended December 2012 were expected to surge 18 percent, South Africa’s fourth biggest bank said on Wednesday.

In its trading update, Nedbank, which is majority-owned by the life insurer Old Mutual, said basic earnings per share were expected to be 23 percent higher.

Investors liked this trading update as the company’s share price gained 0.31 percent or 59 cents in early Wednesday trade on the JSE. Investors viewed this as a breath of fresh air to the South African banking sector which was depressed by Absa’s poor year-end results last week.

“Absa’s accounts last week prompted many investors to start wondering whether other banks were not going to report bad results,” a Johannesburg-based analyst told Ventures Africa Online.

Absa, which is South Africa’s biggest retail bank, reported a 9 percent drop in net profit in the year to December 2012 due to higher credit impairments.

Nebdank is the first bank to release a positive trading update after Absa. It is not clear how the other big banks, FirstRand and Standard Bank, have performed in their annual results during the period. Old Mutual, which owns Nedbank, is an international long-term savings, protection and investment group.

Originating in South Africa in 1845, the group provides life assurance, asset management, banking and general insurance to more than 12 million customers in Africa, the Americas, Asia and Europe. Old Mutual has been listed on the London and Johannesburg Stock Exchanges since 1999.

In the year ended 31 December 2011, Old Mutual reported adjusted operating profit before tax of £1.5 billion ($2.3 billion) (on an IFRS basis) and had £267 billion ($411 billion) of funds under management from core operations.