FirstRand Limited

FirstRand said group earnings increased 16% on a pre-provision basis, but normalized earnings contracted 5% after the U.K. motor issue; ROE was 21.5% on the pre-provision view and 18.3% after the provision. For continuing operations, normalized earnings rose 13% and ROE was 24.9%; group NII was up 8%, NIR up 12%, and operating costs rose 9%. The group reported a 29 basis point increase in margin, a CET1 ratio of 13.9%, excess capital of ZAR 10 billion after the final dividend, and dividends per share up 16%. The final U.K. motor finance provision was GBP 756 million on the balance sheet, with a cumulative provision raised to date of ZAR 16.4 billion and a current-period earnings impact of GBP 403 million or ZAR 8.7 billion. Looking ahead, management revised guidance upward and now expects FY2027 earnings growth around the midpoint of the new range, with high single-digit NII growth, a strong NIR trajectory, and improving credit outcomes.

Mary Vilakazi framed the year as a pivot toward South Africa and broader Africa after exiting U.K. consumer finance, saying this should unlock higher earnings growth and better ROE over time. She emphasized that the group still has meaningful runway in core franchises, partnerships, insurance, invest, corporate banking, and selected African markets, and said the business is leaning into growth rather than just defending share. Her tone was confident and constructive, with repeated references to stronger macros, operational leverage, and the ability to deploy excess capital into value-creating opportunities.

Markos Davias focused on the mechanics of the results and the bridge between reported and normalized numbers. He said the additional U.K. motor provision and related costs totaled GBP 403 million or ZAR 8.7 billion in the period, and that the final balance sheet provision is GBP 756 million; he also noted the cumulative provision raised to date is ZAR 16.4 billion. On the core business, he highlighted normalized earnings up 13%, NII up 8%, NIR up 12%, margins up 29 basis points, operating costs up 9%, and CET1 at 13.9%, while also pointing to ZAR 10 billion of excess capital and a dividend increase of 16%.

Analysts asked about the revised through-the-cycle credit loss ratio range, whether the small unsecured broadening reflected a greater appetite for unsecured risk, and whether the bank has the infrastructure to manage it. Management said the group range remains 100 basis points-130 basis points, with only a modest roughly 10 basis point increase at retail due to faster unsecured growth; they said the business is prepared to manage that risk. On WesBank, they said the vehicle price adjustment is an out-of-model, conservative provision because the data is not yet available. On NII and trading, management said FY2027 NII growth should be predominantly volume-led, with some margin normalization from current elevated levels, while RMB’s fair value and markets recovery still has runway left.