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Johannesburg - FirstRand [JSE:FSR], South Africa’s
second-largest lender by market value, reported a 26% rise in first-half
profit, helped by a decline in bad debts and higher income from loans.
Normalised earnings per share (EPS), which excludes certain items,
totalled 102.4 cents in the six months to end-December, from a restated 81.1c a
year ago.
FirstRand had said its diluted normalised EPS would rise by
as much as 28%.
Net interest income, a measure of earnings from lending, rose 22%. Group bad debts fell 12%, but non-interest income - which includes fees and commissions - was little changed.
FirstRand would not want to spend more than 10% of its capital
on new acquisitions, CEO Sizwe Nxasana said.
“When we do expansion, we have a combination of greenfield
and acquisitions. If we do acquistions, they will typically be small- to
medium-size,” Nxasana told Reuters in an interview.
“We wouldn’t want to spend more than, I would say, 10% of our capital on new acquisitions or new opportunities.”
South African banks are recovering after a 2009 recession
lowered interest rates and sapped lending earnings.
The lenders are back to profitability helped by steady
declines in bad debts, but demand for credit remains muted.
FirstRand's smaller competitor Absa Group [JSE:ASA] posted a
21% rise in its full-year earnings.
Shares of the $19bn bank are up over 15% so far this year, compared with a 6% rise by the Johannesburg’s blue-chip Top 40 - (Tradeable) [JSE:J200] index.
