A sharp decline in bad debts propelled South Africa’s FirstRand to a 22 percent jump in full-year profit, the latest sign banks in Africa’s top economy are recovering from a recession-driven credit strain.

The bank’s chief executive also told Reuters in an interview that valuations in Nigeria have become more realistic. FirstRand walked away from acquiring a Nigerian bank earlier this year after failing to agree on terms.

South Africa’s banking industry — dominated by FirstRand and rivals Standard Bank, Absa Group and Nedbank — is slowly recovering from a recession that caused massive job losses and sparked a surge in bad loans.

FirstRand has been outpacing rivals in managing impairments, or bad debts, an area that has been one of chronic weakness for South Africa’s “big four” commercial banks. “We were comfortable with the improvement of the impairments, it was stronger than the other big four banks … the quality of loan book continues to improve,” said Faizal Moolla, an analyst at Avior Research in Cape Town.

“They are actively managing the loan book, making sure they collect all outstanding amounts and having sufficient security in place.” Shares in FirstRand were up 3.1 percent at 20.67 rand, helped by both the earnings and a special dividend of 70 cents from the previouFirstRand, which has operations in seven African countries outside of South Africa, is combing Nigeria for opportunities, Chief Executive Sizwe Nxasana said.

“We are looking across the board, we haven’t quite decided yet. We are looking at all opportunities in that market,” Nxasana said in a telephone interview when asked about Nigeria.

“Valuations are getting a bit more realistic, so there are opportunities that exist in the market.”

The bank in June walked away from acquiring Nigeria’s government-rescued Sterling Bank after failing to agree on terms for the deal. Oil-rich Nigeria is seen as a critical market for both South African banks and Western lenders looking to compete in Africa. Nigeria has rescued nine of its lenders following a industry crisis and speculation continues that more of the rescued banks will be sold to foreign financial firm.

Pan-African lender Ecobank Transnational Inc said on Monday it will acquire 100 percent of another failed Nigerian bank, Oceaninc Bank. FirstRand is also looking in Angola for a possible acquisition, Nxasana said.

FirstRand, along with other South African lenders, has been looking to boost its presence in Africa. It said on Monday it will be paying $5.4 million for Zambia’s government-controlled Finance Bank. FirstRand said normalised earnings per share, which exclude certain one-time items, totalled 179.4 cents in the year to end-June, compared with a restated 146.9 cents in the 2010 period. Bad debt costs totalled 3.78 billion rand, down a third, while net interest income, the measure of a bank’s earnings from lending, rose 6 percent to 17.4 billion.

IEA cuts oil demand growth forecast on economic woes

World oil consumption will increase less quickly than expected this year and next as the pace of global economic growth slows, the International Energy Agency (IEA) said . In its monthly oil market report, the Paris-based agency said financial and economic head winds were gathering momentum and the oil market supply-demand balance could ease in the short term if recent supply disruptions receded.

“It is possible that we could see an easing in the tightness of the market in the months ahead,” said David Fyfe, head of the IEA’s oil industry and markets division. The IEA cut its estimate of global oil demand growth this year by 160,000 barrels per day (bpd) to 1.04 million bpd and trimmed its 2012 demand growth estimate by 190,000 bpd to 1.42 million bpd.

The agency, which advises industralised countries on energy policy, now sees world oil demand rising to 89.28 million bpd this year increasing to 90.69 million bpd in 2012. The Organization of the Petroleum Exporting Countries and the U. S. government Department of Energy have also both cut their forecasts for global oil demand growth this month.

The IEA raised its forecast for Libyan crude oil production capacity by the end of this year and said OPEC oil output had also risen, helping increase industry inventories in the developed industrialised economies.