South Africa’s most valuable bank rolls with the punches

Despite taking a major hit from its ongoing UK motor commission case, FirstRand reported strong results for its 2025 financial year.

FirstRand is South Africa’s most valuable banking group, with a market cap of R416.95 billion, and owns FNB, RMB and Wesbank. The company operates in South Africa, and certain markets in sub-Saharan Africa, the UK, and India.

On Thursday, 11 September 2025, FirstRand released its results for the year ended 30 June 2025.

These results showed a strong performance, with basic earnings per share up 10% to 748.7 cents.

The bank’s net income after cost of capital rose by 12% to R11.57 billion, while its return on equity grew from 20.1% to 20.2%.

The group’s credit loss ratio also remained low at 0.85%, compared to 0.81% in the 2024 financial year.

FirstRand attributed these strong results, in part, to its diversified portfolio, including Wesbank and RMB’s strong contributions. 

It explained that the gradual recovery in retail and the particularly strong performance from WesBank partially mitigated the early credit strain emerging from FNB’s commercial portfolio. 

RMB delivered healthy profit before tax growth, mainly emanating from its private equity and investment banking franchises.

The broader Africa portfolio’s contribution was softer, with FNB’s broader Africa franchise increasing profit before tax by 5% and RMB’s broader Africa pre-tax profit declining 2%.

In addition, FirstRand said its discipline in the allocation of financial resources was crucial in delivering this performance.

This is because the company faced ongoing macroeconomic challenges in the jurisdictions where the group operates.

This strong performance was especially important in the 2025 financial year, as FirstRand had to raise billions in provisions relating to its UK motor commission matter.

This matter arose from a dispute surrounding transparency concerns in how dealers earn commissions from lenders.

In October 2024, the UK Court of Appeal found that FirstRand and other lenders unlawfully arranged motor finance deals without properly disclosing commissions paid to car dealers.

The lenders were also accused of not obtaining fully informed consent from customers.

Now, FirstRand has appealed this decision to the UK Supreme Court, arguing that motor dealers should not owe fiduciary duties to consumers and that its past practices were compliant with then-existing laws.

The UK Supreme Court has yet to deliver its judgment. The decision is expected to clarify whether motor dealers owe any duties when arranging finance and whether commission must always be disclosed clearly.

Regardless of the case’s outcome, FirstRand has had to raise a provision of R2.6 billion related to this matter in its 2025 financial year. The group raised R3 billion in provisions in its 2024 financial year.

In addition, FirstRand incurred a further R253 million of legal and professional fees related to this matter in 2025.

Therefore, the total pre-tax impact of these two items relating to the UK motor commission matter is R2.96 billion for the 2025 financial year.

However, given the company’s strong results for this year, FirstRand’s board felt comfortable to increase the company’s total dividend by 12% to 466 cents.