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Johannesburg - FirstRand, the R75.5bn banking group, warned operating conditions had worsened as consumers battled a mountain of debt. Asset prices have also declined, it said in a trading statement issued on the Stock Exchange News Service (Sens) on Tuesday.
"When announcing results for the six months to December 2008, FirstRand highlighted to shareholders that it expected the macro environment, both domestically and globally, to deteriorate further.
"This scenario in fact played out even more negatively than the group anticipated," it said in its statement.
FirstRand said headline earnings would be between 28% to 33% lower than the 191.5c/share recorded for the year to end-June 2008.
The group added that it expected the impact of interest rates cuts in South Africa to be felt only in late 2009 or early 2010.
Earnings from Rand Merchant Bank, a subsidiary of FirstRand, continued to weigh on FirstRand which said earnings contribution from the firm, which services the high net worth sector, would be down between 50% and 55%.
FirstRand said its fixed income, currencies and commodities (FICC) business had a "very poor" second half of the year.
This was on the back of losses in the trading and international lending portfolios while its private equity offering is also expected to deliver a loss, it said.
- Fin24.com