Nedbank shares jump after capital adequacy statement
Nedbank also said its first three months were strong, thanks to Ecobank’s return to profitability
Nedbank’s share price rose 5.4% to R316.50 on Thursday morning after releasing its quarterly capital adequacy statement. Nedbank said it enjoyed "a strong performance for the first three months of the year, underpinned by the return to profitability of Ecobank Transnational Incorporated (ETI)" during the March quarter. JSE-listed banks face the problem under Basel 3 rules that using perpetual preference shares for "tier 1" capital is gradually being phased out. This has forced South African banks to buy back their preference shares and replace them with bonds. "The total tier 1 and total capital adequacy ratios were adversely impacted by a further grandfathering of old-style preference shares worth R531m in January 2018, in line with the Basel 3 transitional arrangements," Nedbank said in its Pillar 3 Basel 3 capital adequacy statement. This resulted in its tier 1 ratio slipping to 11.7% at the end of March from 12.3% at the end of December. "Both the group and bank remain well capi...
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