Johannesburg - FirstRand [JSE:FSR] shares rose after SA's
second-largest bank, said on Tuesday its
full-year earnings likely rose by as much as 27%.
FirstRand said it expects diluted normalised earnings per
share to increase by between 22% to 27% from 179.4 cents for the year to
end-June. A poll of 17 analysts by Thomson Reuters showed an average forecast
for 20% profit growth.
“It’s an excellent performance, a very good result. It’s
definitely better than consensus,” said Adrian Cloete, an analyst at Cadiz
Asset Management.
The bank did not give a reason for the expected rise in
profit. Earnings likely rose as a result of a strong performance by the retail
arm First National Bank (FNB) and vehicle financing unit Wesbank, Cloete said.
FNB has waged a fierce campaign for its competitors' customers, which analysts expect will boost its non-interest revenue.
FirstRand is due to report full-year results on September
11. Its local rivals, all of whose financial year end in December, have so far
reported leaner first-half results.
Industry lender Standard Bank Group [JSE:SBK] posted a slim
9% rise in first-half earnings, while third-ranked Nedbank Group [JSE:NED]
returned a 24% improvement.
South African banks have been pushing high-margin unsecured
lending to counteract a drop in long-term loans like mortgages, and falling
transactional account fees.
FirstRand has also been creeping north away from its
traditional South African base to secure more business. It announced last month
a $91m purchase of a 75% stake in Merchant Bank Ghana.
It also has its eye on Nigeria, Africa’s most populous
nation that is also expected to be the continent’s biggest economy in a few
years.
FirstRand's shares were up over 2% at R27.95, and nearly 35% stronger so far this year. The Top 40 - (Tradeable) [JSE:J200] index was 0.36% lower on the day.
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