Old Mutual's Nedbank reports strong first quarter

Old Mutual’s Nedbank division reported a strong first quarter after its Ecobank subsidiary returned to profit.

Nedbank’s net interest income rose at a low- to mid-single digit pace in the three months to the end of March while non-interest revenue grew more quickly as the bank gained clients and sold them more products. Costs and the ratio of credit losses to loans rose in line with expectations.

Old Mutual holds a majority stake in Nedbank, one of South Africa’s biggest lenders, which owns 21% of Ecobank, a pan-African commercial bank. Nedbank’s income from Ecobank for the first six months of 2018 is an estimated R240m (£14m), a turnaround from a R61m loss a year earlier.

"Nedbank Group produced a strong performance for the first three months of the year, underpinned by the return to profitability of Ecobank […] in their fourth-quarter of 2017," Nedbank said.

Nedbank said its earnings guidance for 2018 was unchanged after a pick-up in economic confidence in South Africa whose effect on business had been slight so far.

“Credit demand and transactional activity has remained subdued, but an improvement is expected from the second half of 2018,” it said