FirstRand, Africa’s largest bank had good in 2016

Aldermore

Africa’s largest bank by asset base, FirstRand said its full year net profit rose by 13%.

The bank’s shareholders are getting to their credit ZAR11.889 billion compared to ZAR10.480 billion posted in 2015.

Headline earning per share grew 14% year on year. Last year earning per diluted share was ZAR185.4 per share, in 2016, shareholders are gaining ZAR211.5 per share.

FirstRand’s board of directors declared a gross cash dividend totalling 119 cents per ordinary share out of income reserves for the six months ended 31 December 2016.

As an outlook for 2017, the bank said it is looking ahead the group expects economic growth to pick up slightly in calendar year 2017, although this is unlikely to provide significant support to topline growth for some time. In addition, global and domestic political risks continue to pose downside risk to this expectation.

FirstRand is committed to its current investment cycle despite ongoing topline pressures, as it believes its growth strategies both in broadening its financial services offerings and building its rest of Africa franchise will deliver outperformance over the medium to long term. The group aims to deliver real growth in earnings and an ROE of between 18% and 22%.

The bank has over time tried to expand into commercial banking in Nigeria but it has not succeeded in striking a deal. Negotiations with troubled Sterling Bank did not pull through.

Lauritz Lanser Dippenaar, Chairman of the group complained that banks were overpriced and the group is still much interested in acquisition when it gets a good price.

RMB Holdings is the largest shareholder in FirstRand with 33.9% stake while another 45% are owned by institutional and individual investors on the JSE.