FirstRand (FSR) H1 2025 earnings summary

Executive summary

• Delivered strong operational and earnings growth for the six months ended 31 December 2024, with normalised earnings up 10% year-over-year to R20.9bn and ROE at 20.8% within the 18–22% target range.

• Net asset value grew 9% to R207.3bn, and the ordinary dividend per share increased 10% to 219 cents.

• Cost-to-income ratio improved to 48.9%, reflecting strong cost management and operational leverage.

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

• Segment performance was resilient across FNB, WesBank, RMB, Aldermore, and Broader Africa, with diversified earnings and strong deposit franchise momentum.

Financial highlights

• Normalised earnings increased 10% year-over-year to R20.9bn; NIACC up 12% to R6.2bn.

• Net interest income grew 4%, supported by 8% deposit growth and 7% core lending advances growth; net interest margin stable at 4.47%.

• Non-interest revenue rose 8%, with fee and commission income up 8% and insurance income up 10%.

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

• Dividend per share increased 10% to 219 cents; dividend cover at 1.7 times.

Outlook and guidance

• Full-year earnings growth expected above the long-term target range, with ROE to remain within 18%–22%.

• NII growth to be slightly weaker in the second half as endowment impact from rate cuts materialises, but NIR growth could be higher if private equity realisations occur.

• 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 motor commission provision.

• Dividend cover maintained at 1.7x, payout ratio at 59%.