FirstRand (FSR) H1 2025 earnings summary

Executive summary

• Normalised earnings rose 10% to R20.9 billion for the six months ended 31 December 2024, with ROE at 20.8% and cost-to-income ratio improving to 48.9%.

• Net asset value grew 9%, with a four-year CAGR of 9%, and interim dividend per share up 10% to 219 cents.

• Credit loss ratio remained stable at 0.84%, at the bottom of the through-the-cycle range, evidencing strong credit quality.

• All major business segments delivered earnings growth: FNB up 6%, RMB up 7%, WesBank up 12%, Aldermore up 16%.

• Group maintained a strong capital position, with CET1 ratio at 13.6% and dividend cover at 1.7 times.

Financial highlights

• Advances grew 7% to R1.71 trillion and deposits grew 9% to R2.16 trillion, supported by strong deposit franchises.

• Net interest margin held steady at 4.47%; net interest income increased 4%.

• Non-interest revenue grew 8%, driven by fee and commission income and 10% growth in insurance income.

• Ordinary dividend per share increased 10% to 219 cents; dividend cover at 1.7x.

• Investment income rose 37%, led by private equity portfolio earnings up 24%.

Outlook and guidance

• Full-year earnings growth expected above long-term target of nominal GDP +0% to 3%, with ROE to remain within 18%-22%.

• NII growth to be slightly weaker in H2 as endowment impact from rate cuts materialises; NIR growth could benefit from private equity realisation.

• Credit loss ratio expected at the lower end of the TTC range, with further improvement in retail.

• Operating expenses to increase below inflation, excluding the UK motor commission provision.

• Second half earnings expected to be slightly stronger than first half.