Nedbank, the South Africa-based bank, logged a rise in earnings of 15.9 per cent last year.

South Africa’s Nedbank has seen its earnings increase by an impressive 15.9 per cent to R8.67 billion, as revenue grew 11.8 per cent to R19.361 billion ($1.766 billion) in 2013. The strong performance brought the bank’s full-year dividend per share up 19 per cent to 895 cents.

According to a statement, the strong performance comes down to good results from its latest strategic initiative, an increasing footprint across Africa, as well as growth in the firm’s wealth division.

“Nedbank's growing franchise, together with the progress made with our strategic focus areas, has enabled the group once again to meet its target for growth in diluted headline earnings per share. In a challenging environment the group delivered a strong performance across a broad front, which resulted in improvements in both returns on assets and returns on equity,” said chief executive Mike Brown.

In particular, Nedbank Wealth achieved record headline earnings in 2013 as the division saw a 25.3 per cent increase in earnings as they soared from R718 million to R900 million. The results were mainly attributable to strong growth in the areas of asset management, financial planning and stockbroking, as well as a significant year-on-year reduction in impairments, the statement explained.

Overall, Nedbank Group performed well throughout the year ended 31 December 2013 thanks to good revenue growth, impairments increasing at a slower rate than net interest income and disciplined expense management. To this end, the group generated economic profit of R2.114 billion up 39 per cent from 2012’s R1.521 billion.

Taking on the rest of Africa

A key part of Nedbank’s strategy has been to become “Africa's most admired bank” by delivering sustainably to all stakeholders as well as the continent, by providing employment to an additional 588 permanent staff in South Africa; leading a culture and values development programme; becoming all-encompassing by investing in its distribution footprint; innovating mobile and online banking and also consistently complying with regulation such as the Basel III.

In order to expand its foothold in Africa, Nedbank implemented the “Rest of Africa strategy” which incorporates a strategic alliance with Ecobank in West and Central Africa, and the strengthening of existing network, as well as the expansion of its presence in the Southern African Development Community and East Africa. To this end, Nedbank said it has the rights to take up to a 20 per cent shareholding in ETI in 2014, while the acquisition of a majority shareholding of Banco Unico in Mozambique will be completed by the end of March 2014, “providing the group with a pathway to control over time”, the statement explained.

“This will contribute to the strengthening of Nedbank's franchise and client proposition in SADC and East Africa, increasing our presence to six countries,” the bank added.

Growth prompts increase in expenses

Nebank’s significant growth strategy also caused expenses to rise as staff-related costs increased by 10.5 per cent, while investments in distribution channels and marketing costs also impacted the budget significantly. However, this did not impact the overall profit of the firm.

Finally, Nedbank also announced that it has made recent changes to its board, as David Adomakoh was appointed independent non-executive director of Nedbank Group and Nedbank Limited with effect from 21 February 2014. This follows the departures of non-executive directors Don Hope and Thenjiwe Chikane, who left in the summer of 2013.