FirstRand Limited reported strong financial results for the six months ending 31 December 2024, showcasing resilience and growth across its diversified portfolio. The group, which operates through major brands like FNB, RMB, WesBank, Aldermore, and Ashburton, continued to deliver value for shareholders despite macroeconomic challenges. CEO Mary Vilakazi attributed the solid performance to disciplined financial resource allocation, robust customer franchises, and a through-the-cycle approach to credit risk management.
FirstRand’s profit rose 10% as South Africa’s biggest lender by market value boosted loans in its home market. Net income increased to R20.9 billion in the six months through December, and the lender declared an interim dividend of R2.19 rand per share.
● Normalised Earnings: R20.9 billion, up 10% YoY (Year-on-Year).
● Return on Equity (ROE): 20.8%, well within the company’s 18% - 22% target range.
● Net Asset Value (NAV): R207.3 billion, a 9% YoY increase.
● Earnings Per Share (EPS): Basic normalised EPS increased 10% to R3.73.
● Ordinary Dividend Per Share: R2.19 cents, up 10% YoY.
● Net Interest Income: Increased 4% with declining South African interest rates.
FirstRand estimates the South African Reserve Bank will further reduce interest rates by 50 basis points (0.50%) to 7% this year.
FirstRand Limited's recent financial performance has received positive attention from analysts. The consensus rating, based on evaluations from 10 analysts, stands at "Outperform", reflecting a strong outlook for the company's prospects. The average 12-month price target set is R87.94. Price targets range from R83 to R96 indicating a favorable view of the company's valuation. Analysts anticipate an earnings growth rate of 9.9% and an earnings per share (EPS) growth rate of 10% over the next three years.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
