Troubling times in South Africa haven’t dampened native Nedbank Group’s first quarter results, the Old Mutual-owned group reported yesterday.

Troubling times in South Africa haven’t dampened native Nedbank Group’s first quarter results, the Old Mutual-owned group reported yesterday.

Despite ongoing strikes in the country’s platinum mining sector, a weaker rand and inflation triggering a 50 basis point increase in interest rates at the start of this year, the group posted net interest income growth at 8.7 per cent for the first three months of 2014.

With an annualised increase of 17.5 per cent, assets under management at Nedbank rose to R198.6 billion ($19.2 billion). Annualised deposits taken by the group increased by 9.8 per cent. It credited growth in call, term and cash management deposits for this.

Average interest-earning banking assets growth was 10.4 per cent for the first quarter of this year almost double the 5.9 per cent recorded in the first quarter of 2013.

However not all aspects of the business performed so well. Non-interest revenue growth stood at only 2.7 per cent while commission and fees inflated by 6.1 per cent due to net client acquisitions and cross sell.

Credit loss ratio is slowly decreasing at Nedbank; from 1.22 per cent for Q1 2013 and 1.06 at Q4 2013, it stands at 0.89 at the end of March this year.

“Overall, growth rates were impacted by reduced personal loans volumes, the decision taken to not increase transactional banking fees in 2014 to facilitate increased long term client growth and lower levels of general transactional activity in the consumer and small business sector,” the group said in a statement.

Nedbank’s common equity tier 1 ratio for the quarter was 12.5 per cent, the same level as the 2013 full year.

The bank had a particularly strong 2013. Its earnings increased by 15.9 per cent to R8.67 billion, and revenue grew 11.8 per cent to R19.361 billion (see more here).

The group is still in the process of acquiring an initial shareholding of 36.4 per cent of Banco Unico. After receiving regulatory approval from the Mozambican and South African banking regulators as well as the country’s respective investment ministries and reserve banks, the closure of the transaction is expected to take place next month.

The unrest in South Africa still looms with Nedbank anticipating interest rates to increase by a further 50 basis points, while GDP in the country is forecast to grow by 2.5 per cent.