FirstRand Interim Profit Rises to Record as Loans, Fees Climb
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Article content(Bloomberg) — FirstRand Ltd.’s interim profit rose to a record as Africa’s biggest bank by market value earned more from fees and commissions and as growth in loans boosted revenue.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentNormalized earnings jumped 11% to 23.2 billion rand ($1.4 billion) in the six months through Dec. 31 from a year earlier, the Johannesburg-based company said in a statement on Thursday. It declared an interim dividend of 2.59 rand per share.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentNon-interest revenue climbed 12% as sustained momentum in the insurance business, a significant rebound in the performance of the global-markets unit and further private equity realizations lifted fees and commissions.Article contentArticle contentNet interest income grew 7.7%, driven by improving advances growth from its lending books in South Africa, broader Africa and the UK. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentIts return on equity improved to 21.1%, within the targeted range of 18% to 22%.Article contentSouth Africa’s central bank resumed its rate-cutting cycle in November, easing borrowing costs for consumers in the continent’s biggest economy. While the bank’s projection model showed further reductions this year, the outbreak of war in the Middle East has seen interest-rate traders price in a chance of a hike as the conflict raises energy prices and revives concerns about faster price growth.Article contentThe fate of FirstRand’s UK unit still hangs in the balance as it awaits a final ruling over the amount of compensation banks have to pay to consumers over claims they were missold car loans, Chief Executive Officer Mary Vilakazi said last month. Article contentThe UK’s Financial Conduct Authority announced in October that it expects some of the country’s biggest auto lenders to spend £8.2 billion ($11 billion) to compensate customers. Getting the refund program up and running will cost lenders another £2.8 billion, bringing the total cost to £11 billion. Article contentArticle contentFirstRand has set aside more than £200 million to cover any provisions and other related expenses linked to the saga but said in November that a proposed redress scheme could require it to increase that amount even further.Article contentThe Financial Conduct Authority said it will likely publish final rules for the motor-finance compensation scheme in late March, with a likely implementation period of three months for most agreements and as many as five months for older ones.Article contentThe group will update shareholders on this matter following the announcement of the FCA’s final redress scheme, it said Thursday.Article contentThe South African bank offers motor financing through its MotoNovo unit in the UK, which it acquired in 2006. FirstRand’s overall business in the UK comprises about 10% of its earnings and about 20% of its balance sheet, it has said previously.Article contentSign up here for the daily Next Africa newsletter, and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.Article contentTrending Bank of Canada governor warns of growing risks to financial stability Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Legal fight over propane terminal clouds Canada's energy export push Energy US Sinking of Iranian Warship Piles Pressure on India's Modi PMN Business Housing affordability improves yet again, though not for the right reasons Real Estate Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Bank of Canada governor warns of growing risks to financial stability Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Legal fight over propane terminal clouds Canada's energy export push Energy US Sinking of Iranian Warship Piles Pressure on India's Modi PMN Business Housing affordability improves yet again, though not for the right reasons Real Estate