Banking

 


  • RMB HOLDINGS LIMITED (RMH)

    RMH’s main asset is a fully diluted interest of 34% in FirstRand, and its performance is therefore primarily related to that of FirstRand. The RMH strategy also includes investments in the property sector with a long-term capital growth focus.

    RMH’s contribution to Remgro’s headline earnings for the year under review increased to R2 644 million (2018: R2 486 million) due to the good operational performance of FirstRand. FirstRand’s contribution to RMH’s normalised earnings amounted to R9 502 million (2018: R8 995 million), while RMH Property contributed a normalised earnings of R44 million (2018: R16 million). RMH’s funding and administration costs increased to R248 million (2018: R196 million).

    RMH’s property investments are housed in a wholly owned subsidiary, RMH Property Holdings Proprietary Limited (RMH Property), managed by a dedicated investment team. During the financial year, the intrinsic value of RMH Property decreased from R722 million to R649 million.


  • 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 RMH. The contribution of FirstRand to Remgro’s headline earnings for the year under review increased to R1 093 million (2018: R1 039 million).

    FirstRand’s headline earnings for its year ended 30&nbspJune 2019 increased by 5% to R27 887 million (2018: R26 509 million). The group’s performance to June 2019 includes a full 12 months’ contribution from Aldermore, compared to a three-month contribution in the previous year.

    Net interest income (NII) increased 9% (18% including Aldermore), underpinned by strong growth in deposits of 11% and solid advances growth of 9%, partially offset by the negative capital and deposit endowment impact given the five basispoints decline in average interest rates over the year. Non-interest revenue (NIR) increased 6%, a resilient performance given the lack of private equity realisations compared to the prior year. Realisations were down 60% year-on-year.

    FirstRand 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. Normalised earnings for the year ended 30 June 2019 increased 6% to R27.9 billion, at a normalised return on equity (ROE) of 22.8% (2018: 23.0%).

    FNB’s normalised earnings increased 11% to R25.3 billion. ROE increased from 38.8% to 41.9%. FNB’s results reflect another strong operating performance from its domestic franchise, driven by healthy NIR growth on the back of ongoing customer gains and increased transactional volumes, and high-quality NII growth, particularly from deposit generation. The performance of FNB’s rest of Africa portfolio improved significantly.

    RMB’s normalised earnings decreased by 4% to R7.1 billion and the ROE reduced from 25.3% to 21.7%. RMB’s results were impacted year-on-year by the non-repeat of significant private equity realisations in the second half of the prior year, however, the rest of its portfolio delivered a resilient performance driven by growth in earnings and solid operational leverage.

    WesBank delivered a subdued performance and its normalised earnings was down 2% to R1.8 billion.

    FirstRand acquired Aldermore effective 1 April 2018. Aldermore delivered a solid operational performance, contributing normalised earnings of R1.7 billion for the 12 months (2018: R0.3 billion for the three months) at an ROE of 12.4% (2018: 12.1%).