Profile

FirstRand provides banking and insurance and investment products and services to retail, commercial, corporate and public sector customers in South Africa and several African countries. The group is differentiated by its owner-manager culture and executes its strategy through a portfolio of leading franchises; Rand Merchant Bank (RMB), First National Bank (FNB), WesBank and Ashburton Investments.

FIRSTRAND LIMITED (FIRSTRAND)

FirstRand’s contribution to Remgro’s headline earnings repre­sents Remgro’s 3.9% direct interest in FirstRand and excludes the indirect contribution from FirstRand through Remgro’s 28.2% interest in RMBH. The contribution of FirstRand to Remgro’s headline earnings for the year under review increased to R840 million (2014: R749 million).

FirstRand’s results for its year ended 30 June 2015 reported that headline earnings increased by 13% to R21 141 million (2014: R18 671 million), as all three franchises delivered strong operational performances and continued to outperform the market. The group’s net interest income and non-interest revenue grew by 16% and 8% respectively year on year as operating cost increases were limited to 10%, reflecting variable staff costs related to higher levels of profitability, the continued investment in infrastructure, operating footprint and regulatory requirements.

The group believes that normalised earnings more accurately reflect operational performance and therefore headline earnings are adjusted to take into account non-operational items and accounting anomalies.

FirstRand’s normalised earnings for the year under review increased by 14% to R21 286 million (2014: R18 663 million). FNB’s contribution to normalised earnings increased by 16% to R11 300 million (2014: R9 701 million). This was driven by strong growth in both existing and new markets resulting from innovative products and delivery channels and increased transactional volumes across all of its platforms, particularly its electronic and digital platform. RMB contributed R5 888 million (2014: R5 507 million) to FirstRand’s normalised earnings, representing an increase of 7% from the previous year, as its diversified investment banking and corporate portfolios delivered strong profit growth, with a growing contribution from bespoke structuring transactions and activities in the rest of Africa. The contribution of WesBank to normalised earnings increased by 10% to R3 309 million (2014: R3 013 million), as it continued to grow new business volumes across all portfolios and was able to contain core operating cost increases to 3%.