Burger, who is expected to step down this month, said sentiment and markets had recovered since the outcome of the ANC elective conference in December 2017.
“In the medium to longer term, given the market-leading positions of its businesses and the growth strategies it is executing on, FirstRand considers itself strategically well positioned to benefit from renewed growth,” Burger said.
“However, given the structural nature of many of South Africa’s challenges, the group believes that the domestic fundamentals will not change quickly. Therefore it expects a similar macro picture for the remainder of its financial year to June 2018.”
FirstRand, which has a market capitalisation of R425.37billion, said Burger would be succeeded by his deputy, Alan Pullinger, in April.
The group also announced the appointment of deputy chief executive of South African life insurer MMI Holdings, Mary Vilakazi, as group chief operations officer, effective July 1. Yesterday, FirstRand reported a 6percent increase in half-year profit, a substantial slowdown from a year ago, as a weak economy hit investment in the period.
The group’s normalised earnings grew 7percent in the six months to the end of December, while its dividend per ordinary share was up 9percent.
The performance of the company’s two largest businesses, FNB and Rand Merchant Bank (RMB), offset WesBank’s dismal six months.
RMB grew pre-tax profits 11percent and delivered a return on equity (ROE) of 22.9percent. However, WesBank’s pre-tax profits declined 2percent in the period under review. Wayne McCurrie, a senior portfolio manager at Ashburton Investments, said FirstRand’s results were in line with expectations, and the group’s ROE was very good at 22.5percent.
“All South African banks should start to grow earnings in double digits later this year. Throw in lower interest rates, lower bad debts, better top-line growth, etc, and you can easily get there,” McCurrie said.
FNB grew its pre-tax profits 11percent to R10.4bn on the back of a strong performance from its South African business, which grew pre-tax profits by 12percent. FNB’s customer numbers were more than 7.8million by the end of the reporting period.
The bank’s insurance revenues increased 14percent, while assets under management increased 16percent.
Jacques Celliers, the chief executive of FNB, said FirstRand continued to invest in digital platforms and its digital migration strategy, which has been very effective in the consumer businesses.
FirstRand shares rose 0.94percent on the JSE yesterday to close at R74.90.