South Africa’s Nedbank says lending rise boosts income

South Africa’s Nedbank reported an 8.7 percent jump in net interest income in the first quarter after a lending push grew total advances by nearly 15 percent. South Africa’s fourth-largest bank by market value said net interest income – the difference between interest received on loans and paid out on deposits – was 5.57 billion rand ($536 million), while non-interest revenue was up 2.7 percent to 4.5 billion rand. Nedbank said its credit loss ratio – the proportion of bad debt costs to total loans – improved to 0.89 percent from 1.22 percent a year ago. Total advances were up 14.9 percent to 601 billion rand, while deposits increased nearly 10 percent to 618 billion rand.

Nedbank is expected to exercise its right to take up a 20 percent stake in pan-African lender Ecobank Transnational by Nov. 25 after lending the Togo-based bank $285 million.

The whole deal could cost Nedbank between $450-$500 million, Chief Executive Mike Brown said, or about 0.7 percent of tier 1 common equity.

Nedbank shares were down 0.25 percent to 236.61 rand at 0834 GMT, but have gained nearly 13 percent so far this year, the second-best performing bank after Barclay Africa Group that has risen 17 percent