GT re­flects and pre­dicts

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IN­VESTORS IN FIRSTRAND who failed to take heed of chair­man GT Fer­reira’s warn­ing in the group’s 2007 an­nual re­port that its per­for­mance this year would not match last year’s growth, will be pay­ing con­sid­er­ably closer at­ten­tion to his 2008 com­ments, looking for guid­ance from one of this coun­try’s most sea­soned bankers.

In his can­did fi­nal re­port as chair­man of FirstRand Group (of which he’s a co-founder) Fer­reira warns the global fi­nan­cial credit cri­sis still has a long way to run.

“De-lever­ag­ing on a mas­sive scale has been the theme of the last 12 months and should prob­a­bly be re­garded as one of the key de­ter­mi­nants of the depth and du­ra­tion of the cur­rent cy­cle and go­ing for­ward will have a sig­nif­i­cant im­pact on global growth,” writes Fer­reira, adding: “I be­lieve we’re likely to ex­pe­ri­ence on­go­ing fi­nan­cial tur­bu­lence and eco­nomic strain for an ex­tended pe­riod of time.”

Fer­re­ria’s in­stincts 12 months ago were right. Then he told share­hold­ers not to ex­pect a per­for­mance that would match FirstRand’s bumper re­sults of 2007. In that year re­sults were boosted by con­sid­er­able gains in eq­uity trad­ing at Rand Mer­chant Bank and a strong per­for­mance from its re­tail bank­ing op­er­a­tions that were driven by the con­sid­er­able con­sumer ap­petite for debt.

How­ever, not even he fore­cast how rapidly the global en­vi­ron­ment would de­te­ri­o­rate and the im­pact it would have on the group. “I did not imag­ine the car­nage that would visit the fi­nan­cial mar­kets in the last year,” he says.

How­ever, it doesn’t mean the group in­tends rest­ing on its lau­rels and wait­ing for the storm to pass be­fore ex­plor­ing new rev­enue-gen­er­at­ing op­por­tu­ni­ties.

“While it’s nat­u­ral and cor­rect for a

Good in­stincts.

GT Fer­reira

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