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. These 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, RMH Property expanded its core partnership by acquiring a direct interest in Atterbury Europe.
RMH’s contribution to Remgro’s headline earnings for the year under review increased to R2 486 million (2017: R2 232 million) due to good operational performance of FirstRand. FirstRand’s contribution to RMH’s normalised earnings amounted to R8 995 million (2017: R8 334 million), while RMH Property contributed a normalised earnings of R16 million (2017: R8 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 039 million (2017: R931 million).
FirstRand’s headline earnings for its year ended 30 June 2018 increased by 12% to R26 509 million (2017: R23 762 million), as its businesses delivered quality top-line growth and superior return on equity. The group’s net interest income and non-interest revenue grew by 10% and 7% respectively year on year, while operating expenses increased by 9%.
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 8% to R26 411 million (2017: R24 471 million).
FNB’s contribution to normalised earnings increased by 16% to R14 877 million (2017: R12 801 million). The results reflect another strong operating performance from its domestic franchise, driven by strong non-interest revenue growth on the back of ongoing customer gains and increased transactional volumes, and high quality net interest income growth, particularly from deposit generation. FNB’s rest of Africa portfolio showed an improved performance year on year.
RMB contributed R7 327 million (2017: R6 919 million) to FirstRand’s normalised earnings, representing an increase of 6% from the previous year, driven by good growth in high quality earnings and solid operational leverage. WesBank’s contribution to normalised earnings decreased by 9% to R3 626 million (2017: R3 996 million), with both the South African retail and UK vehicle asset finance businesses posting declines in profits, whilst the personal loans business performed strongly and corporate delivered a solid performance.