South Africa’s most valuable bank on a roll

FirstRand expects to report another strong set of results, as the financial services group experienced a solid performance for the year through June 2025.

FirstRand is the largest financial institution by market capitalisation in Africa, with operations in South Africa and certain markets in sub-Saharan Africa, the UK, and India.

On Wednesday, 26 June 2025, the financial giant released an update to shareholders on its operational and financial performance for the year to June 2025. 

The company explained that, despite a challenging operating environment, its operational and financial performance for the 2025 financial year will be more positive than the previous guidance provided in March 2025. 

It said overall balance sheet growth remained healthy in this period, with absolute advances and deposits increasing in line with guidance. The South African lending franchises, in particular, remained resilient. 

The bank reported strong commercial and corporate lending, as corporate origination and overall production year-on-year showed good momentum.

However, it noted that the strategy to distribute lower margin assets means year-on-year absolute corporate advances growth will be lower. 

Regardless, commercial advances continued to grow across the portfolio due to targeted lending strategies, including focused SME lending.

FirstRand reported that its growth was further supported by the ongoing acquisition of new customers. 

In retail, homeloans advances growth was relatively muted, which the bank attributed to household confidence remaining subdued.

However, vehicle finance performed well during this period due to WesBank’s well-established relationships with dealers and original equipment manufacturers. 

Advances growth in FirstRand’s broader Africa portfolio also generally trended higher, and in the UK operations, advances growth trended ahead of guidance.

The UK’s strong performance is attributed to healthier-than-expected production, which is still anchored to property finance, where margins have remained resilient.

Despite the impact of interest rate cuts, growth in net interest income will be slightly better than the group guided in March 2025, supported by a reduced ‘opportunity cost’ emanating from the group’s asset-liability management strategy. 

Overall growth in non-interest revenue is also in line with guidance, with fee and commission income growth similar to the first half.

FirstRand explained that RMB’s knowledge-based fees delivered sustained growth off an already high base, supporting this revenue. 

The group reported that its trading income has remained weak, but said this was offset by healthy private equity realisations. 

In addition, insurance income continued to show good momentum in operational terms, but absolute year-on-year growth is impacted by the impending sale of MotoVantage.

The group added that its expenses were well-managed during the period, with operating expenses significantly better than guided. 

With the UK motor commission-related provision in the base, cost growth is negative. Without the provision, cost growth will trend below average inflation.

In March 2025, FirstRand told shareholders that it expects to deliver full-year earnings growth above its long-term target range of nominal GDP + 0% to 3%.

Now, the group expects to deliver full-year earnings growth of low double digits to mid-teens, which is also above its long-term target range. 

FirstRand’s year-end results are expected to be released in September 2025.