FirstRand lifts full-year profit

File picture: Independent Media

File picture: Independent Media

Published Sep 8, 2016

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Johannesburg - FirstRand, Africa’s biggest bank by market value, posted an increase in fiscal full-year profit.

Net income rose to R22.6 billion ($1.61 billion) in the 12 months through June, from R21.6 billion a year earlier.

Earnings adjusted for one-time items was R22.4 billion compared with analyst estimates for R22.9 billion.

Earnings per share excluding one-time items increased 4.7 percent to R3.99 from R3.81 last year, missing the R4.07 median estimate of 13 analysts surveyed by Bloomberg.

“South Africa’s economy remains fragile due to continuing low domestic growth, which is forecast to prevail over the next few years,” FirstRand said in a statement on Thursday.

“Low growth combined with weaker balance sheets of some state-owned enterprises has added fiscal risk which is likely to result in a sovereign downgrade by the end of 2016.”

FirstRand, which operates an investment bank, a retail lender, a vehicle-financing unit and an asset-management business, is present in 11 sub-Saharan African countries.

“Ongoing political and policy uncertainty, combined with an even more constrained global growth scenario, will continue to pose further downside risk,” FirstRand said in the statement.

The bank “expects credit growth to remain subdued, particularly as the origination businesses also continue to cut appetite in higher risk segments”.

“Volumes in the transactional activities are expected to remain resilient.”

BLOOMBERG

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