South Africa’s oldest bank is shooting the lights out

FNB produced a strong set of financial results for the six-month period to the end of 2025, with it recording double-digit profit growth in South Africa. 

This is remarkable growth for a bank that generated over R15 billion in profit in South Africa during the same period last year. 

FirstRand, which owns FNB alongside Wesbank and RMB, revealed this in its interim results for the first half of its 2026 financial year. 

The banking group singled out FNB’s strong performance, with the bank continuing to benefit from its cautious approach to lending, with its credit-loss ratio falling to 1.65% and its return on equity surging to 41%. 

“This was a result of capital optimisation initiatives, an improving retail credit performance, and non-interest revenue (NIR) growth,” FirstRand explained. 

NIR is becoming increasingly vital for South African banks, as they look to enhance their value-added services and increase client engagement to reduce their sensitivity to interest rates. 

Furthermore, this revenue is extremely high quality and profitable for a bank, with it consuming relatively little capital in comparison to traditional banking activities, such as lending. 

“FNB benefited from strong NIR growth from value-added services offered to its core transactional client base, including FNB Connect, Send Money, eBucks, and nav,” FirstRand said. 

Approximately three million customers utilised these services, resulting in total revenue growth of 14% to over R1.6 billion within the retail segment. 

FNB’s strong South African performance was somewhat offset by a weaker performance in the rest of Africa, which saw its profit before tax decline by 12%. 

This was largely due to constrained client activity, increased funding costs and credit provisions in Botswana and higher operating costs in Ghana as FNB rolled out a new banking platform in the West African country. 

FNB’s overall normalised earnings rose by 8% year-on-year to R13.1 billion. 

This division’s strong growth was coupled with a stellar performance from FirstRand’s corporate and investment banking division, RMB. 

RMB’s normalised earnings surged by 23% to R5.4 billion on the back of strong net interest income and despoti growth. 

WesBank, FirstRand’s vehicle and asset financing division, experienced somewhat muted growth of 5%, with normalised earnings rising to R1.2 billion. 

FirstRand continues to be plagued by the fallout of the Financial Conduct Authority matter in the United Kingdom, with the banking group booking R330 million in legal and specialist costs relating to it in the six-month period. 

The banking group has retained a provision of around R5.8 billion (£240 million) for the matter. 

CEO Mary Vilakazi has said the fate of FirstRand’s UK unit remains in the balance as it waits for the final ruling in the matter that relates to compensation for consumers over claims they were mis-sold car loans. 

“We haven’t made the decision, because the Financial Conduct Authority ultimately has to come up with a final redress,” Vilakazi told Bloomberg.

However, in relation to the banking group’s financial performance, Vilakazi struck an upbeat tone. 

“As anticipated, FirstRand delivered a commendable performance for the first six months of the year, characterised by strong topline growth underpinned by solid momentum in advances and deposits,” Vilakazi said. 

“Once again, the group’s diversified portfolio of leading client franchises – FNB, RMB and WesBank – has supported this performance, as all delivered growth and improved returns.”

“The capital, asset and liability optimisation strategies implemented over the past year have resulted in a sustainable, structural uplift in margin.” 

“This was supportive of an improved normalised ROE of 21.1%. This high ROE and resultant strong capital position enable an 18% growth in dividend.”

FirstRand bank reported an 11% increase in adjusted half-year earnings on Thursday, driven by strong revenue growth, “excellent” contribution from non-interest revenue and improving credit performance.

Normalised earnings rose to R23.2 billion in the half-year. Net interest income before impairments at a group level grew 8% to R48 billion, while non-interest revenue rose 12% to R31.9 billion.

FirstRand declared a bumper 259 cents interim ordinary dividend.