Firstrand delivers double-digit HEPS hike

FirstRand, one of South Africa's leading financial institutions, has announced an impressive double-digit hike in headline earnings per share, showcasing the resilience and strength of its various business units. CEO Alan Pullinger shared in an interview with CNBC Africa the key factors driving this solid performance, including a robust credit story, strong interest income, and non-interest revenues. The bank saw notable contributions from its entities such as FNB, RMB, and the UK-based Alderwall business. One standout performer highlighted by Pullinger was the broader Africa portfolio, which made a significant 10-11% contribution to group earnings. This growth in the African markets underscored the potential for expansion and further development across the continent. Despite the positive results, Pullinger acknowledged the challenges in the current economic environment, pointing out elevated costs and uncertainty surrounding factors like inflation, interest rates, and sovereign debt in African regions. He emphasized the importance of prudent risk management and cautious lending practices, especially given the ongoing economic volatility. Looking ahead, Pullinger discussed the bank's strategic focus on customer quality, emphasizing the need to maintain a careful approach to credit origination and customer selection. He highlighted the bank's efforts to steer clear of high-risk products and customers, which have helped mitigate potential affordability pressures amid rising inflation and interest rates. When discussing the outlook for South Africa's economy, Pullinger expressed cautious optimism, projecting modest GDP growth rates in the near term. He underscored the need for sustained economic reforms, responsible fiscal policies, and continued efforts to combat issues like crime and corruption. Pullinger also touched on the upcoming elections and the potential impact on economic momentum, emphasizing the importance of political stability and effective governance. In addressing the global macroeconomic landscape, Pullinger raised concerns about uncertainties, particularly related to China's economic slowdown and the ongoing energy and infrastructure challenges in South Africa. He expressed confidence in the progress being made in the energy sector, with optimism for improvements in the country's energy supply by 2024. Pullinger outlined key focus areas for the bank's growth strategy, highlighting investment in energy, logistics, transport infrastructure, and anti-corruption measures. He stressed the pivotal role of political leadership in addressing these challenges and driving long-term economic growth. In conclusion, FirstRand's solid financial performance, strategic focus on risk management, and proactive approach to future growth opportunities position the bank well for continued success in the dynamic and evolving market landscape.