FirstRand rewards shareholders as profit rises
Source: Business Day
FirstRand , as expected, rewarded shareholders with a special dividend and also increased its normal dividend by 27% for the year to June.
The banking group had been expected to reward shareholders following the unbundling of insurer Momentum and the sale of its 45% stake in short-term insurer OUTsurance for R3,6bn.
Announcing its annual results to June, the Sizwe Nxasana led group said it would pay a special dividend of 70c per share, as well as an ordinary dividend of 81c from 64c in the prior year.
Announcing the results, Mr Nxasana said normalised headline earnings rose by 22% to R10,1bn and diluted normalised headline earnings per share were also up 22% to 179,4c, from 146,9c.
The group’s results show that its key revenue units contributed to the earnings growth, with income at banking subsidiary FNB up by 51% to R5,6bn, of which the bank’s local unit accounted for R5bn, an increase of 46% and the investment banking unit’s earnings grew by 33% to R3,6bn.
“With regards to the group’s overall income statement, its operating franchises – FNB, RMB and Wesbank – continued to show very strong operational performances,” said Mr Nxasana.
He also said the group had an appetite to grow in Africa, saying the continent offered a compelling investment case due to the expected growth in target markets. FirstRand’s banking unit, FNB, recently started operations in Tanzania and yesterday FNB Zambia bought Finance Bank of Zambia, making it the fifth largest retail bank in the copper producing country by assets.