Old Mutual’s Nedbank lifted by higher-risk unsecured lending

City A.M. Reporter
NEDBANK Group said yesterday it is on track for double-digit profit growth this year, the latest South African bank to benefit from a rise in higher-risk lending.

Hampered by weak corporate demand for credit, the country’s big banks have ramped up unsecured lending – the profitable but riskier practice of giving loans that are not backed by collateral. Nedbank said in a trading statement that it expects to meet its full-year target for earnings growth.

Net interest income, the measure of earnings from lending, increased nine per cent to 14.5bn rand (£1bn) in the nine months to 30 September, the bank said.

Non-interest revenue, which includes fees and commissions, rose 14 per cent to 12.4bn rand. Total loans were up by seven per cent, while the ratio of bad debt charges decreased.