South Africa’s most valuable bank going strong

FNB-owner FirstRand delivered a strong performance in the first half of its 2025 financial year as the financial services giant continues to go from strength to strength.

FirstRand is South Africa’s most valuable bank by market capitalisation and, through its portfolio of integrated financial services businesses, operates in South Africa, certain markets in sub-Saharan Africa, the UK, and India.

The company’s portfolio consists of FNB, RMB, Wesbank, Aldermore, MotoNovo, Ashburton Investments, DirectAxis, and MotoVantage.

FirstRand released its results for the six months through December 2024 on Thursday, 6 March 2025.

These results revealed that the company delivered a strong first-half performance, with basic earnings per share up 10% to 373.1 cents per share.

The company reported that its return on equity (ROE) remained strong at 20.8%, compared to 20.6% in 2023.

FirstRand’s net asset value grew by 9% to R207.3 billion, while its profit for the period increased by 10% to R22.53 billion.

While the company’s credit impairment charges rose by 8% to R6.9 billion, mainly due to higher non-performing loans, its credit performance remained better than expected.

Therefore, despite these higher impairments, FirstRand’s net interest income (NII) after impairments rose by 4% to R37.76 billion.

In addition, the company’s average gross loan-to-deposit ratio improved to 82.4%, indicating how well FirstRand manages its balance sheet.

FirstRand’s results were also boosted by strong non-interest revenue (NIR) growth of 8%, as fee and commission income rose 8%, insurance revenue was up 10%, and investment income shot the lights out with 18% growth.

From a segmental perspective, most of FirstRand’s key business units performed well.

FNB grew its customer base to 12.15 million, with strong growth in digital transactions.

The company said this segment’s new customers and resilient transactional volumes also helped drive fee income growth of 6%.

RMB also performed well and reduced its credit impairments by 17% to R516 million.

While FirstRand’s WesBank segment faced some pressure from softer consumer demand, it still delivered solid advances growth.

Looking ahead, FirstRand said it is looking ahead the group expects the global economic environment to remain uncertain. 

“The interest rate cutting cycle is mostly done, and supply-chain fragmentation and trade tariffs will mean that, for the foreseeable future, global inflation is unlikely to reduce materially from current levels.”

However, offsetting these global headwinds is a more constructive outlook for South Africa’s economic performance. 

“Whilst the South African Reserve Bank faces constraints to cutting interest rates further, the benefits of lower inflation and recent interest rate cuts will provide some support for households and corporate activity,” it said. 

“The improvement in energy supply, signs of a better functioning rail and port infrastructure together with an increased focus on improved municipal service delivery should lower the cost of doing business, lift confidence and increase private sector investment.”

FirstRand declared an ordinary dividend of 219 cents per share, up 10% from the previous year.