The R205 billion hidden powerhouse cashing in on Chinese cars

FirstRand’s vehicle and asset finance unit, WesBank, has rapidly adapted to the rise of affordable Chinese vehicles in South Africa. 

WesBank has effectively partnered with multiple suppliers and dealer networks that sell Chinese cars to ride the wave of these vehicles becoming increasingly popular in South Africa. 

While this may sound obvious, many companies in the automotive sector have been caught out by just how rapidly Chinese cars have displaced legacy brands. 

Motus, South Africa’s largest dealership network, was caught out and is now beginning to increase its exposure to Chinese brands. 

This, however, has come with some pain, as it has streamlined its operations by combining brands within some of its dealerships, making some back-office roles redundant. 

WeBuyCars, the company that has gone from success to success in the automotive sector over the past 20 years, has also felt some pain from the rise in Chinese brands. 

Their affordable vehicles have attracted many buyers away from the used car market, as they can find relatively high-quality, ‘cheap’ new cars for sale. 

This is expected to turn into an advantage for WeBuyCars in the future, with more Chinese vehicles entering the used market, expanding its pool of vehicles. 

WesBank has proven remarkably adaptive in this regard, partnering with several Chinese brands through supplier and dealer alliance agreements. 

“Chinese car brands are entering the market rapidly, offering advanced technologies, electric and hybrid options, and competitive pricing,” FirstRand explained in its most recent interim results. 

The banking group revealed further that WesBank’s advances have grown strongly on the back of its partnerships with Chinese brands. 

These partnerships are a key part of WesBank’s operating model, with it partnering with manufacturers, suppliers, and large dealer groups to win and maintain market share. 

It also benefits immensely from its access to FNB’s huge retail banking client base and tapping into the eBucks rewards programme to drive loyalty. 

WesBank’s strong growth during the period can be seen in the graph below from FirstRand’s interim results presentation. 

Not all sunshine and rainbows

WesBank has undergone a process of cleaning up its lending book to an extent, with it shifting focus towards attracting quality new business over market share. 

This strategy may result in slightly slower growth, but it will come with higher quality advances, translating into more stable income that is relatively more profitable for the business unit. 

FirstRand explained in its results that WesBank is playing an increasingly important role in entrenching, protecting, and servicing FNB’s main-banked clients. 

“This means that WesBank continues to focus on opportunities to originate business through FNB’s digital platform,” FirstRand explained. 

However, this focus, while it is likely to pay off for WesBank in the future, has come with some margin pressure in the short term as competition for quality clients has picked up. 

Despite this pressure, WesBank produced a strong set of financial results for the six months to the end of 2025, with normalised earnings up 11% to R1.2 billion. 

The division increasingly looks as though it is on the front foot, growing advances by 13% year-on-year to over R205 billion. 

Crucially, the high-quality focus appears to be paying off, with non-performing loans as a share of advances falling to 4.49%. Its credit-loss-ratio, however, rose slightly to 1.2%. 

WesBank does not have the opportunities that other segments of FirstRand’s business, particularly FNB, have for growing non-interest revenue (NIR). 

NIR is extremely beneficial for a bank, with it being far more profitable than traditional banking activities, such as lending. 

This revenue is typically generated through fees and commissions on transactions, engagement with various platforms, and the usage of value-added services. 

WesBank, in this space, has a naturally smaller scope as it does not operate a transactional banking business, which can generate substantial NIR. 

The only area open to WesBank for this type of revenue is fleet management and leasing, which had a difficult six-month period. 

“NIR was negatively impacted by losses incurred in the fleet management and leasing business from the disposal of vehicles originating from short-term leases,” FirstRand explained. 

“This development is attributable to the robust conditions prevailing in the new car market, particularly increased demand. This has, in turn, exerted downward pressure on used vehicle prices.”