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FNB on the ‘front foot’ as tough times bite, says Celliers

[Watch] Comments on ‘sim swap’ scam and eBucks.

JOHANNESBURG – FNB CEO, Jacques Celliers says the bank is going into a tough economic environment on the “front foot” and he remains bullish on the bank’s growth prospects in the short term.

That FNB has taken its “consumerist storyline” – including efficient online processes and its eBucks rewards programme, both of which won it a wave of new customers over the past five to six years in its main retail bank – and replicated it in its business and high-end bank offerings, is yielding significant new growth momentum, Celliers said.

“We still see a lot of opportunity to switch customers from our competitors,” Celliers added, noting that the bank stemmed attrition over the half-year to December 2015 in the lower-income end of the market.

“We are reinventing ourselves across so many different parts of the franchise. We are on the front foot and are excited that we can do more,” he told Moneyweb on Tuesday.

For the six months to December 2015, FNB, which represents FirstRand’s retail and commercial segments in Africa, grew pretax profits 10% to R9 billion.

FirstRand CEO, Johan Burger said FNB’s earnings reflected the benefits of cross-selling and upselling into its customer base, with evidence of increased transactional volumes in the middle market segment and a successful e-migration strategy.

FNB’s cross-sell ratio was driven largely by the activation of digital channels. For example, when logging into online banking, customers receive suggestions of new products that may be of interest to them.

During the period, FNB launched a credit life product on personal loans to customers (using FirstRand’s life licence), as well as an Ashburton Investments private equity fund. Ashburton is FirstRand’s asset manager.

Burger said that FirstRand plans to cross-sell the group’s products to existing customers, as part of efforts to diversify its revenue mix away from transactional and lending, to reflect more profits from insurance and savings and investments.

FNB grew advances 11% over the period, with deposit growth of 14%. In its retail bank, FNB grew deposits 14% to R20.8 billion, “on the back of ongoing acquisition of core transactional accounts and further strong momentum in sales of new products, in particular the money market maximiser,” FirstRand said.

Celliers said FNB would continue to invest in digital platforms and encourage customers to use electronic channels.

“We now process more cash deposits outside branches at ATMs, than inside branches,” Celliers said.

Volume growth of 13% across electronic channels helped offset the impact of lower interchange fees, which were down more than R300 million year-on-year.

Interchange fees – which banks pay to one another for processing transactions and generally pass on to customers, such as retailers – were capped last year by the Reserve Bank.

Celliers said that FNB was grateful for the attention received by the recent ‘sim swap’ scam in which it was implicated. “It has created a lot more conversation [around fraud] and suddenly everyone is aware of it again,” which is good from a customer education point of view.

Watch Jacques Celliers discussing the ‘sim swap’ scam and eBucks in more detail.

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In spite of criticisms FNB has with Capitec been the top bank in SA for many years. They do seem to be innovative and on their feet.

If the bank allows someone to transfer cash out of your account to another bank account, and the recipient bank cannot tell the police who the receiving bank account is registered to, that bank should not only be liable to compensate the customer who lost the money, but also face a penalty for not ensuring that the account is FICA compliant.

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