FirstRand earnings skyrocket: 'The strength of the rebound surprised us'
FirstRand Limited (Africa’s biggest bank by market value) has released its results for the year ended 30 June 2021, posting record earnings between January and June.
The bank had expected to return to 2019 levels during the 2023 financial year, and the rebound in the second six month period was a surprise says CEO Allan Pullinger.
Profit after tax was up 48% to R28.1 billion rand and a dividend will be paid out.
FirstRand owns FNB, RMB and Wesbank.
Bruce Whitfield interviews Pullinger on The Money Show.
We're pleased with where we've got to. We made the point that the strength and speed of the rebound did surprise us.Allan Pullinger, CEO - FirstRand
It is all around credit - we had to raise all these huge provisions at the start of the pandemic. We had a huge book of relief, giving customers payment holidays... Of course you're never sure how that's all going to work out...Allan Pullinger, CEO - FirstRand
I guess things have worked out better for us from a credit perspective, better collections... At the same time the economy has improved as well. If you add those two things together it means that you have a much lower charge for credit that drive your earnings.Allan Pullinger, CEO - FirstRand
Hopefully this points to some steady growth going forward, Pullinger says.
He details the damage FirstRand suffered during the July riots and how they viewed this setback.
More than 30 of our branches were vandalised and about 250 ATMs were properly damaged but I think we almost learned from the pandemic. The business didn't get into a victim mindstate - we really went into 'how do we solve this....'Allan Pullinger, CEO - FirstRand
We pushed the button on plans and so we had to roll out a whole lot of mobile ATMs, mobile branches... We still have a long way to go, some of our branches still haven't opened...Allan Pullinger, CEO - FirstRand
... but there are some silver linings to this thing. I think the fact that it didn't scale throughout the country is massively positive... I do think the country ultimately triumphed here...Allan Pullinger, CEO - FirstRand
While South Africans are still taking financial strain it remains a very attractive country where FirstRand continues to make good returns, Pullinger says.
And he does believe that the economy is "starting to turn".
For more detail, listen to the interview below: