JOHANNESBURG - FIRSTRAND share price rallied at least 2.67 percent to R61.60 on Thursday morning after the bank reported a six percent hike in normalised earnings to R27.9 billion despite a challenging macroeconomic operating environment.
For the year ended 30 June, the bank earnings growth was led by a strong performance of R17.6 billion from FNB, R7.1 billion from RMB’s client franchises, and R1.7 billion from the UK specialist bank, Aldermore.
FNB’s South African business performed strongly, executing its digital platform strategy to cross-sell and up-sell products utilising data and behavioural analytics.
But RMB experienced a decline in normalised earnings as its private equity business entered an investment cycle, with R2.1 billion in new investments approved this year.
RMB's results were impacted year-on-year by the non-repeat of significant private equity realisations in the second half of the year to June 2018.
WesBank’s normalised earnings were also down two percent as a result of difficult trading conditions during the year.
FirstRand’s diluted headline earnings per share gained five percent at 497.2 cents, compared to 472.7 cents the previous year, with the babk declaring a gross cash dividend of 291 cents per ordinary share.
Chief executive Alan Pullinger said the the group produced quality real growth in earnings despite a challenging operating environment and the high earnings base in 2018 from private equity realisations.
“The group’s strategy to deliver customer-centric integrated financial services will ensure future franchise value and sustainable superior returns to shareholders,” he said.
The group said domestic economic activity will remain under pressure for the foreseeable future as a result of weak domestic demand and low income growth.