FirstRand targets Nigeria to boost profits

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

Johannesburg - FirstRand Ltd., South Africa’s second-largest lender, said it started offering services in January to Nigerian companies as part of a plan to increase profit outside its slowing home market.

“We are growing into commercial banking in Nigeria,” Sizwe Nxasana, chief executive officer of FirstRand, said in a telephone interview from Johannesburg today.

“It’s using our merchant banking license. We will scale it up.”

Nxasana said last month he favoured organic growth after three deals to buy assets in Zambia, Ghana and Nigeria failed in as many years.

Rand Merchant Bank, the investment banking unit that started operations in Nigeria a year ago, is working with the commercial division of FirstRand’s retail business to find corporate clients in West Africa’s largest economy.

FirstRand may still consider buying Nigeria’s Mainstreet Bank Ltd. or Keystone Bank Ltd. as growth in its home market slows, Nxasana said.

South Africa has entered an interest rate tightening cycle, which will put pressure on consumers, the bank said as it announced first-half results earlier today.

Net income rose 24 percent to 8.84 billion rand ($815 million) in the six months through December, the Johannesburg- based company said in a statement today, adding that 2012’s numbers were restated because of new accounting requirements.

Earnings per share excluding one-time items climbed 21 percent to 1.59 rand.

FirstRand rose as much as 1.3 percent and was 0.3 percent higher at 34.60 rand as of 10:45 a.m. in Johannesburg trading.

The lender boosted its interim dividend by 40 percent to 77 cents per share. - Bloomberg News

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