Nedbank in strong position, Old Mutual reports

Old Mutual reported on the health of its majority-owned South African banking subsidiary Nedbank Group on Wednesday, with the organisation - one of the country's largest banks - showing some strong growth.

Headline earnings at Nedbank increased 9.6% during calendar year 2015, to ZAR 10.83bn (£497m). Its diluted earnings per share were up 8.5% to 2,242 South African cents.

Nedbank saw growth in its tangible net asset value per share hit 9.9%, with return on equity - excluding goodwill - of 17%. The bank's common equity tier 1 ratio was 11.3%.

The bank announced a full-year dividend per share of 1,107 cents, up 7.7%.

"We delivered growth in diluted headline earnings per share of 8,5% - ahead of the guidance we gave during the year," said chief executive Mike Brown.

"Earnings growth was driven by ongoing momentum in NIR and disciplined cost management, combined with the benefit of equity-accounted earnings from our investment in ETI based on our 20% share of their 12 months of publicly reported results to September 2015," he added.

Brown said Nedbank remained committed to long-term value creation for all stakeholders, and was in excellent shape to deal with the challenging macroeconomic environment expected in both South Africa and the rest of the continent.

"Forecast risk has increased, and as a result our guidance for performance in the year ahead is harder than usual to formulate. Against this context 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 of consumer price index plus GDP growth plus 5%," he explained.

"Given the increased forecast risk we will update this guidance with our June 2016 results."