The FirstRand group has reported a 54% jump in normalised earnings at R26-billion in its annual results for the year ended June 2021.
The group managed to grow its net asset value by 10% while producing an economic profit of R4.9-billion. This allowed the bank to pay a full-year dividend valued at 263 cents per share.
Despite the group’s improved performance, its normalised earnings are still 4,8% lower than its pre-pandemic performance.
First National Bank (FNB) outperformed the group’s other underlying assets with normalised earnings up by R16-billion, while return on equity increased by 33%. FirstRand’s other underlying assets include, Wesbank and Rand Merchant bank.
FNB CEO Jacques Celliers says, “Very grateful that we were able to navigate, I guess, 18 months or so of a very challenging environment, lots of uncertainty. And today from a FirstRand perspective to have declared our biggest first month dividend in our history is a very special place for us from which to go into the next cycle. During this time we were able to do two things right, we were able to keep our core customer base going, we were able to grow the client base and we were grateful for their ability to navigate the complexity of COVID-19.”
This week, FirstRand also announced that it will no longer finance new coal-fired power stations with immediate effect. The group said it would no longer provide direct project financing for new coal mines from 2026.
Aluwani Capital Partners Manager Patrick Mathidi says, “Yes, there will be an impact certainly not only on Eskom but on other coal projects across the country and what it means that they won’t stop today and demand their money tomorrow but it means that going forward it will be very difficult for such projects to actually get funding. Where they do have exposure like in Eskom, they’ve given themselves, I guess Eskom before they actually stop.”
In a statement, FirstRand CEO Alan Pullinger notes that the group’s performance demonstrates the quality of its portfolio of businesses and their ability to capitalise on the economic rebound that is currently taking place.
