FNB eyes new digital features
FNB says it is ready to respond to rising competition by creating new digital features and redesigning its transactional banking products if it has to.
“Competition always comes at us either through price or innovation, and we always respond to it,” said FNB chief executive Jacques Celliers. “There’s no element of a competitive value proposition that is out there today we can’t compete with.
“We are fortunate that we are in a good position to respond to anything that comes our way. We can quickly develop new features.”
Newcomers such as Tymebank and African Bank want to disrupt this part of banking. Tymebank said at its investor day in February that SA’s banks were pocketing too much on transactional products.
On Tuesday, FNB ’s parent group FirstRand posted a 7% rise in profit to R13.3bn for the six months to end December, driven mainly by FNB ’s strong performance. FirstRand also owns corporate and investment bank RMB, vehicle financier WesBank and Aldermore, a UK-based retail bank focused on small and medium-sized enterprises. FNB , which contributed 62% of FirstRand’s profit, grew its contribution 13% to R8.7bn, thanks to growth in transactional revenue and unsecured personal loans, which surged 62% in the six months to December.
Transactional banking, including current accounts, debit and cheque cards, contributes the lion’s share of FNB revenue. Profit from it rose 17% to R8bn before tax.
FirstRand’s share price rallied the most in three weeks, closing 2.04% up at R63.39, comfortably outdoing big rivals and the JSE all-share.
Celliers said that at the lower end, where price pressure was intensifying, its fees were approaching zero and it offered services such as e-wallet for free. “We think we are very relevant and our results show record sales on all of our banking propositions,” he said.