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FirstRand warns half-year profits could drop by up to 25%

As the impact of the coronavirus crisis continues to hurt its operation.
Image: Moneyweb

South African lender FirstRand said on Thursday its half-year profits would likely be up to 25% lower, as the impact of the coronavirus crisis continues to hurt operations.

Still, it said, the first four months of its financial year had been better than expected, though it warned it remained “cautious about the sustainability of this rebound”.

“Significant uncertainties remain in the system which may play out in the first six months of 2021,” it said, including a second Covid-19 wave and as-yet unknown longer-term impacts of the first lockdown, while public finance and economic challenges also weigh on growth.

For now, however, it said revenues had been higher than expected, there had been a rebound in non-interest income, which includes things like banking fees, and that its capital position had improved.

It expects its headline earnings per share – the main profit measure in South Africa – to be between 20% and 25% lower in the six months to December 31 than the 294.4 cents it reported a year earlier.

FirstRand shares trimmed losses following its trading statement, and were down 0.13% at 1318 GMT.

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