FILE: First Rand CEO Sizwe Nxasana at the company's 6 months results held in Hilton Hotel in by Simphiwe Mbokazi 453

FirstRand shareholders appeared to take the brouhaha between the government and the management of its consumer bank, FNB, in their stride, with the share price closing just 16c weaker yesterday at R32.89.

 The movement in the FirstRand share price was in line with the mixed to weaker performance of the four major banks. Nedbank and Absa also closed weaker on the day, with Standard Bank the only one of the top four to close firmer. It rose R1.06 to close at R118.27.

 The consensus among analysts appears to be that FNB’s advertising campaign created an unfortunate situation, from which neither the bank nor the ANC emerged unscathed. “It was probably not the greatest thing to do in terms of generating new business,” said Johann Scholtz of Afrifocus Securities.

 “But then Nedbank had a run-in with [the] government recently and I’m not sure whether that really caused much long-term difficulty.”

 Sam Moss, the head of investor relations at FirstRand, told Business Report that she had not been approached with complaints from any of the group’s shareholders. She said that nobody would be forced to resign over the issue and stressed that FNB chief executive Michael Jordaan was not leaving the company.

 Moss spoke from Singapore, where senior FirstRand executives were meeting investors. The executives will also meet investors in Hong Kong and Tokyo. Just over 17 percent of FirstRand’s shareholders are defined as “international”.

 The Public Investment Corporation, which holds 11.3 percent of FirstRand, would not comment on the issue.

 One leading political analyst said FNB’s decision to broadcast an advertising campaign that included exhortations for the public to vote for anyone but the ruling party would have caused trouble in any country in the world.

 But he added that the ANC was “not doing itself a favour by telling kids to shut up”.

 Analysts said that the agreement reached on Friday between FirstRand chief executive Sizwe Nxasana and the ANC would protect the group’s government business.

 “FNB has got quite a lot of government contracts. That’s not really at risk now,” one analyst said.

 “The potential danger of any negative impact is more likely to be felt with regard to getting new business from individuals,” said the analyst, noting that the danger was likely to be countered by more mundane issues such as service and cost.

 The importance of the government to FirstRand is evident from the group’s annual report, where it tops the list of stakeholder groups with which the banking group engages.

 Others on the list are shareholders and analysts, employees, customers, suppliers, communities and civil society.

 FirstRand’s 2012 annual report states: “FirstRand has defined its stakeholders as entities and individuals that are significantly affected by its activities and those which have the ability to significantly impact the group’s strategies and objectives.”

 On the issue of “reputation and investor relations”, Nxasana notes in the annual report: “The group did not suffer any major reputational issues during the year under review.”

 Ironically, the fallout from the advertising campaign, which appears to have been sparked by a small number of YouTube clips deemed offensive by the ANC, comes just months after an extremely positive letter from Paul Harris, a board member and co-founder of FirstRand, went viral.

 The letter, which was intended as a private communication with a friend, ended with this advice: “Maybe best is that you get exposed to some articles and websites that give a more balanced and uplifting perspective of South Africa.”

 The letter and Harris were criticised in some circles for ignoring the country’s challenges.