Johannesburg - Despite a difficult economic climate, diversified financial services holding company RMB Holdings [JSE:RMH] saw normalised earnings increase by 42% to R3.567bn for the year ended June.
This translated into normalised earnings per share of 295 cents, while headline earnings per share rose by 36% to 299.8 cents a share.
The group believes normalised earnings more accurately reflect operational performance. Headline earnings, it points out, are adjusted to take into account non-operational and accounting anomalies.
It declared a total dividend of 124 cents per share to RMBH shareholders, which is a 25% improvement over last years dividend of 99 cents.
RMBH said its diversified portfolio of banking and insurance businesses produced a strong outcome against a volatile and difficult macro background that is only now starting to show signs of improving.
"It is, however, increasingly evident that global economic activity is likely to experience severe 'growth headwinds' over the next few years - notwithstanding radical fiscal and monetary interventions on the part of many developed economies.
"Significant monetary and fiscal stimulus, as well as external trade allowed the South African economy to emerge from recession during the 3rd quarter of 2009.
"Falling inflation and interest rates (now at a 30 year low) eased pressure on real disposable income. However, rising unemployment and uncertainty over the sustainability of the recovery caused credit growth to remain subdued," RMBH said.
It added that the group's earnings recovery was driven mainly by a modest increase in the FirstRand Banking group's top-line revenues and a reversal of the negative factors that bedevilled the prior year's outcome (namely retail lending bad debts and losses in the international trading portfolios).
FirstRand (FSR), in which the group has a stake, along with interests also in Discovery Health and OUTsurance) among other financial services and insurance groups, on Tuesdayh reported a 39% increase in normalised earnings to 9.96 Rbnfor the year ended June.
Headline earnings for the 12 months were up 36% from R6.939bn to R9.453 bn rand.
This translated to diluted headline earnings per share of 176.7 cents versus 126.8 cents previously, and diluted headline earnings per share of 178.3 cents as opposed to 133.1 cents the previous year.
Looking ahead, RMBH said it remains hopeful that the South African economic environment has stabilised.
"Whilst top line revenue growth in the financial services sector will remain challenging over the medium term, the retail credit environment is expected to continue to improve. Bad debts will continue to unwind, which will continue to provide support to the current earnings recovery in the Group's retail banking franchises.
"However, growth in retail advances will remain low as levels of consumer indebtedness are still at historic highs. Corporate balance sheets remain strong and have weathered the cycle well. However, in the current environment investment opportunities remain limited and therefore corporate advances will remain subdued," the group cautioned.
This translated into normalised earnings per share of 295 cents, while headline earnings per share rose by 36% to 299.8 cents a share.
The group believes normalised earnings more accurately reflect operational performance. Headline earnings, it points out, are adjusted to take into account non-operational and accounting anomalies.
It declared a total dividend of 124 cents per share to RMBH shareholders, which is a 25% improvement over last years dividend of 99 cents.
RMBH said its diversified portfolio of banking and insurance businesses produced a strong outcome against a volatile and difficult macro background that is only now starting to show signs of improving.
"It is, however, increasingly evident that global economic activity is likely to experience severe 'growth headwinds' over the next few years - notwithstanding radical fiscal and monetary interventions on the part of many developed economies.
"Significant monetary and fiscal stimulus, as well as external trade allowed the South African economy to emerge from recession during the 3rd quarter of 2009.
"Falling inflation and interest rates (now at a 30 year low) eased pressure on real disposable income. However, rising unemployment and uncertainty over the sustainability of the recovery caused credit growth to remain subdued," RMBH said.
It added that the group's earnings recovery was driven mainly by a modest increase in the FirstRand Banking group's top-line revenues and a reversal of the negative factors that bedevilled the prior year's outcome (namely retail lending bad debts and losses in the international trading portfolios).
FirstRand (FSR), in which the group has a stake, along with interests also in Discovery Health and OUTsurance) among other financial services and insurance groups, on Tuesdayh reported a 39% increase in normalised earnings to 9.96 Rbnfor the year ended June.
Headline earnings for the 12 months were up 36% from R6.939bn to R9.453 bn rand.
This translated to diluted headline earnings per share of 176.7 cents versus 126.8 cents previously, and diluted headline earnings per share of 178.3 cents as opposed to 133.1 cents the previous year.
Looking ahead, RMBH said it remains hopeful that the South African economic environment has stabilised.
"Whilst top line revenue growth in the financial services sector will remain challenging over the medium term, the retail credit environment is expected to continue to improve. Bad debts will continue to unwind, which will continue to provide support to the current earnings recovery in the Group's retail banking franchises.
"However, growth in retail advances will remain low as levels of consumer indebtedness are still at historic highs. Corporate balance sheets remain strong and have weathered the cycle well. However, in the current environment investment opportunities remain limited and therefore corporate advances will remain subdued," the group cautioned.