Old Mutual said Nedbank Group, its majority-owned South African banking subsidiary, was on track to hit growth targets despite market conditions getting worse.

The bank said net interest income for the nine months to the end of September 2012 grew by 9.2% to R14.5bn.

The net interest margin of 3.5% improved as a result of continued benefits from mix change towards higher yielding assets and improved risk-adjusted pricing, it added.

This was partly offset by the cost of enhancing the group's liquidity profile in line with the impending requirements of Basel III and the effect of lower endowment income from the reduction in interest rates in July.

Non-interest revenue grew by 13.9% to R12.4bn, largely driven by growth in fee and commission income of 12.7%, insurance income growth of 27.1% and trading income up 28.3%.

"Given the prevailing economic slowdown and uncertainty combined with the effects of wage related strike actions, the group remains cautious on its outlook," the statement said.

"However, the strength of the Nedbank franchise together with the momentum built in the first nine months of the year allows the group to re-affirm its previous financial guidance to achieve its medium-to-long-term diluted headline earning per share growth target."

That target is "greater than or equal to GDP plus consumer price index plus 5%) in 2012".

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