FirstRand posts jump in profits

Johannesburg - FirstRand, South Africa's second-largest bank, reported a 21 percent rise in first-half earnings on Tuesday, in line with expectations, helped by double-digit growth in earnings from lending.

FirstRand said diluted headline earnings totalled 159.1 cents in the six months to end-December, from 131.2 cents a year earlier.

FirstRand chief executive Sizwe Nxasana. Photo: Simphiwe Mbokazi. Credit: Independent Newspapers

Headline EPS, the main measure of profit in South Africa, excludes certain one-time items.

The results were expected after FirstRand said last month that earnings could rise as much as 22 percent.

Net interest income, or earnings from lending, increased by 22 percent to 12.38 billion rand driven by growth at its retail unit.

Non-interest income, which includes fees and commissions, grew by 13 percent.

South African banks are struggling to boost lending as corporate demand for credit remains slack and while many households remain under pressure, given rising fuel costs, high unemployment and weak growth in Africa's largest economy.

Smaller rivals Barclays Africa recently reported a 14 percent increase in full-year earnings, while Nedbank posted a 15 percent rise.

Leading lender Standard Group is scheduled to report on its performance on Thursday.

All four banks are expanding operations in Africa, where burgeoning economies are beckoning investment from across the globe.

Shares of FirstRand are down 3.9 percent this year, underperforming a 2.6 percent rise in Johannesburg's benchmark Top-40 index. - Reuters