FirstRand sees earnings jump on SA recovery

Sees earnings per share rising by at least 35% in the year through June.
Image: Guillem Sartorio/Bloomberg

FirstRand sees profit rising more than expected after the South African economy rebounded strongly from the early stages of the coronavirus pandemic.

Africa’s biggest bank by market value sees earnings per share rising by at least 35% in the year through June, according to a statement on Monday. Impairments are significantly lower than anticipated and the cost of credit has improved, the Johannesburg-based company said.

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“Current trends indicate that customers are utilising discretionary savings as the economy has opened up,” FirstRand said. “Consumer spending is now back at pre-Covid levels.”

The lender joins other South African banks in seeing an improved outlook as the nation recovers from an economic contraction of 7% last year, largely caused by lockdown measures to contain the coronavirus. Standard Bank Group Ltd. said last week it anticipates headline earnings per share will rise by at least 40% for the six months through June.

South Africa’s central bank sees a a rebound to 4.2% growth this year, and first-quarter data due Tuesday will probably show an expansion from the previous three months. That said, the economy is still likely to have contracted from the mostly pre-lockdown period a year earlier, while power-supply shortages continue to weigh on the recovery.

South Africa’s banking regulator has also relaxed guidance on capital preservation, altered to make sure the industry continued to lend during the worst of the pandemic. That’s helped South Africa’s big four banks issue dividend payments earlier this year.

FirstRand shares rose 0.6% by 10:25 a.m. in Johannesburg, extending the year’s gains to 10%.

© 2021 Bloomberg

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35% jump from last years low? because the economy has most certainly not improved by 35%

Unemployment is an all time record 32.6% plus the Covid-19 third wave is here

Pus 94% of South Africans have serious debt problems?

What happened to 94% of South Africans struggling to pay their debt?

What happened to the Covid-19 third wave?

growth is from a low base.

Sneaky views.

This bank just tries to look good. But behind the scenes their customers are struggling…

Their upper segments are struggling… you must be stupid to pay R399 a month for banking.

End of comments.

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