The Nedbank Group recorded 14 percent revenue growth across the first nine months of the year and will meet year-end targets, despite challenges on the South African market, the company announces.
Non-interest revenue grew by 13.9 per cent to 12,403 million rand ($1.4 million), the company revealed on Monday, up from last year’s corresponding figure of 10,885 million rand ($1.26 million); attributable to strong fee and commission income which boasted a growth of 12.7 percent, and growth in insurance income of 27.1 per cent. The increase in revenue was also largely down to the spike in trading income, which is up by an impressive 28.3 percent.
The company- which is South Africa’s fourth largest bank – also reported strong net income interest growth, rising 9.2 per cent to 14,523 million rand ($1.7 million) up from 13,299 million rand ($1.5 million) at the end of September 2011.
Chief Operating Officer Mike Brown said in a trading update: “Our balance sheet remains well capitalised and liquid, and we are delivering sustainable value to all our stakeholders comprising staff, clients, shareholders, regulators and communities. In this regard we fully support initiatives to ensure responsible lending by all service providers in the unsecured lending market.”
He added: “Importantly, the group is still on track to achieve its earnings growth target in 2012,notwithstanding the more challenging economic environment.”
The banking group considered the mentioned challenges to the South African economy, noting in particular the effects of a slowing in exports across the market, adding that investments continued to be low in the first three quarters due to instability in the economy, further worsened by the strikes experienced across South African industry sectors in the third quarter.
Making note of Moody’s Investor Services and Standard & Poor’s decisions to downgrade South Africa’s sovereign debt ratings – and the downgrade of the foreign currency deposit ratings at the county’s top five banks – the company concluded that the decisions “highlighted the growing concerns around the deteriorating macro environment in SA”.
The bank revised its gross domestic product forecast for the year down to 2.5 per cent, noting additionally that while interest rates currently remain stable, weaknesses in the economy could lead to further downgrades.
