ETI's timely recovery boosts Nedbank’s earnings and dividend
Ecobank Transnational Incorporated’s turnaround, after a string of poor results, means Nedbank could soon reverse a R1bn impairment provision
Nedbank’s investment in pan-African banking group Ecobank Transnational Incorporated (ETI) has provided a timely recovery that has boosted Nedbank’s earnings and dividend for the six months to end-June. ETI’s contribution to Nedbank reversed from a loss of nearly R1.1bn a year ago to a profit of R247m for the first six months of 2018. This almost single-handedly contributed to Nedbank lifting headline earnings a share by 26% to R13.61. Nedbank raised its dividend per share by 14% to R6.95. Nedbank, which is headed by Mike Brown, bought a 20% stake in ETI in 2014. ETI has operations in 36 countries across the continent. Following a series of poor quarterly results, Nedbank raised an impairment provision of R1bn against the carrying value of ETI on its books in 2017. Given ETI’s strong recent performance, which has seen six consecutive quarters of profitability, Nedbank could well reverse the provision at the end of the year, it said. Nedbank’s chief operating officer, Mfundo Nkuhlu, ...
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