Company Data
| Last traded |
R25.00 |
| Change |
R-0.06 |
| % Change |
-0.24% |
| Cumulative volume |
12.14m |
| Market cap |
R140.95bn |
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Johannesburg - Earnings at JSE-listed financial services firm FirstRand [JSE:FSR] have stabilised, but the group warned investors its outlook remained uncertain.
Posting annual results to end-June 2010 on Tuesday, FirstRand reported a 39% earnings increase to R9.9bn, with especially its banking operations (up 41%) and subsidiary Momentum (up 10%) coming to the party.
The FirstRand Group comprises First National Bank (FNB), investment banking group Rand Merchant Bank (RMB), asset finance business Wesbank and insurance business Momentum, which is in the process of merging with Metropolitan.
The results will come as a relief to investors, after the group experienced volatile fortunes during the past two years. In 2008, investment arm RMB was knocked by its exposure to failed derivatives firm Dealstream and in 2009 the group suffered under a weak performance from its international trading arm.
Wesbank also took a knock in 2009 as unemployment started to take its toll on consumers' ability to make vehicle repayments.
"The South African economic environment looks to have stabilised," said FirstRand CEO Sizwe Nxasana. "While revenue growth in the medium term will remain challenging, the retail credit environment is expected to improve."
Nxasana said the recovery was driven by a modest increase in topline revenue as well as the reversal of two significant negative issues during the previous year, namely bad debts and losses suffered in offshore trading portfolios.
Overall impairments decreased 29%, from R8.0bn to R5.7bn, in a sign that business and consumer bad debt was coming under control.
Commenting on where the group saw opportunities, Nxasana said: "The group continues to invest in its infrastructure in South Africa, particularly where significant growth opportunities have been identified, and is growing its footprint and client franchise in other selected African markets."
African operations remained a small contributor to the group. FNB in the rest of Africa saw its earnings contribution rise 2% to R524m, while RMB saw increased numbers of deals through its focus on developing a Chinese, Indian and African trade corridor.
"The China/India-Africa corridor strategy resulted in a number of transactions completed with a very healthy deal pipeline," said Nxasana.
- Fin24.com