FirstRand, SA’s largest banking group by market value, raised its dividend by double digits after reporting robust annual results on the back of a solid operational performance.
The Johannesburg-headquartered group said normalised earnings attributable to ordinary shareholders rose 12% to R36.7 billion for the year to end June, allowing its board to declare an annual dividend of 384c, a 12% year-on-year increase.
"These strong results are a direct outcome of key decisions taken at the beginning of the current macroeconomic cycle," FirstRand CEO Alan Pullinger said in a statement."The credit performance stands out. This is testament to the post-pandemic origination approach, and particularly pleasing given the higher-than-expected interest rate and inflationary cycles experienced across all jurisdictions.
FNB’s credit impairment charge increased 37% to R6.74 billion with the retail lender’s credit loss ratio rising to 132 basis points, from 104 basis points. This was largely due to growth in loans and the consequent increase in arrears in its retail personal loans, card and overdrafts portfolios, though FirstRand said this was in line with historical trends.
RMB, the group’s corporate and investment banking unit, headed up by Emrie Brown, accounted for 25%, or R9.15 billion, of the group’s normalised earnings thanks to a strong performance from its Africa portfolio, which mitigated a softer performance from its South African operations due to higher credit provisions, a weaker performance in its financial markets trading activities and above-inflation staff cost increases.