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Johannesburg – The approach of FirstRand [JSE:FSR] to international expansion as it seeks to become the financial services group of choice in Africa is to focus on growing those markets that it believes are going to provide superior returns.
It involves a three-pronged strategy, said group CEO Sizwe Nxasana.
“For starters we are able to use our balance sheet in South Africa to get involved in cross-border activities, and here we’ve seen very strong growth - over 70% growth in the case of RMB.”
The second leg of the strategy is to establish new businesses.
Over the last three years the group has established new businesses in Mozambique, Zambia, Tanzania as well as Nigeria.
“These are starting to show some promise, but we are still at an early stage and investing for the long term,” said Nxasana.
The third tactic is to look for acquisition opportunities.
In this case, FirstRand prefers smaller acquisitions to the big transformational acquisitions because the latter tend to have a negative impact on return on equity.
The group expects trade between India and Africa to continue to grow which is why it seeks to establish itself not just in India, but also in East Africa.
“The emphasis being on a long-term view in terms of growing into the rest of the continent,” said Nxasana.
Watch the interview of FirstRand's FY results 2013
It involves a three-pronged strategy, said group CEO Sizwe Nxasana.
“For starters we are able to use our balance sheet in South Africa to get involved in cross-border activities, and here we’ve seen very strong growth - over 70% growth in the case of RMB.”
The second leg of the strategy is to establish new businesses.
Over the last three years the group has established new businesses in Mozambique, Zambia, Tanzania as well as Nigeria.
“These are starting to show some promise, but we are still at an early stage and investing for the long term,” said Nxasana.
The third tactic is to look for acquisition opportunities.
In this case, FirstRand prefers smaller acquisitions to the big transformational acquisitions because the latter tend to have a negative impact on return on equity.
The group expects trade between India and Africa to continue to grow which is why it seeks to establish itself not just in India, but also in East Africa.
“The emphasis being on a long-term view in terms of growing into the rest of the continent,” said Nxasana.
Watch the full interview
The lender posted a 20% jump in earnings in the year to end-June on Tuesday.
Diluted normalised earnings per share came in at 271.8 cents from 225.8c.
Net interest income, the measure of earnings from lending, climbed 13% to R24.7bn.
Diluted normalised earnings per share came in at 271.8 cents from 225.8c.
Net interest income, the measure of earnings from lending, climbed 13% to R24.7bn.
Watch the interview of FirstRand's FY results 2013
- Fin24
