Nedbank cautious about growth

WHILE it believes that the worst of the economic cycle has passed, South African banking group Nedbank said its outlook remains cautious.

WHILE it believes that the worst of the economic cycle has passed, South African banking group Nedbank said its outlook remains cautious.

New chief executive Mike Brown said: "The worst of the economic downturn appears to be behind us.

"While the global recovery is fragile and we remain cautious about short-term growth prospects, the improving domestic economic conditions are starting to reflect positively in Nedbank Group's performance."

He was commenting on the group's performance for the first quarter of 2010 - his first set of results since taking over the helm from Tom Boardman on March 1 this year.

During the quarter ended March, the group saw net interest income decrease by 2percent to R4,046billion. Average interest-earning banking assets increased by 0,8percent. The net interest margin narrowed from 3,39percent for the 2009 year to 3,38percent for the quarter (Q1 2009: 3,48percent).

Continued focus on risk-adjusted asset pricing has offset the compression in margins which was primarily driven by lower endowment resulting from the reduction in interest rates and liability margin compression.

The credit loss ratio for Nedbank Corporate worsened slightly from the ratio for the year to December 2009, mainly in the Property Finance portfolio. Nedbank Capital's credit loss ratio for the quarter also increased relative to the 2009 year. - I-Net Bridge

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