Bloomberg News

Old Mutual’s Nedbank Says It Will Beat Annual Profit Goal

August 01, 2011

(Updates with analyst estimates starting in second paragraph.)

Aug. 1 (Bloomberg) -- Nedbank Group Ltd., the South African bank controlled by insurer Old Mutual Plc, forecast it will beat its full-year earnings target as bad-loan impairment charges improve and transaction revenue increases.

Per-share profit excluding one-time items climbed 26 percent to 6 rand a share in the six months through June, the Johannesburg-based lender said in a statement today. That missed the 6.55-rand median estimate of four analysts surveyed by Bloomberg.

Nedbank is “well positioned to deliver growth in earnings for 2011 in excess of our medium- to long-term financial target,” Chief Executive Officer Mike Brown said in the statement. The lender targets earnings per share growth before one-time items of 5 percentage points above inflation plus gross domestic product expansion.

Nedbank, South Africa’s fourth-largest lender by assets, added 94,000 retail-banking clients in the first half and boosted lending to win a bigger share of South Africa’s consumer market from rivals such as Standard Bank Group Ltd. and Absa Group Ltd., controlled by Barclays Plc. London-based Old Mutual has said it may sell its stake in Nedbank before the end of next year as it seeks to cut debt.

A first-half dividend of 2.65 rand was declared for the half-year period, an increase of 25 percent, Nedbank said. Net income in the six months ended June 30 jumped 28 percent to 2.76 billion rand ($414 million), a level still below the peak reached before the global financial crisis in 2008.

Nedbank is the best-performing lender out of South Africa’s four biggest banks on the six-member FTSE/JSE Africa Banks Index, having returned 7.8 percent this year.

--Editor: Vernon Wessels, Stephen Taylor, Alastair Reed.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net;

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net


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