FirstRand declares interim dividend as earnings make faster-than-expected recovery

FIRSTRAND yesterday declared an interim dividend after it saw its halfyear earnings recovering faster than it expected following the Covid-19 outbreak last year.

The financial services group declared an interim dividend of 110 cents a share for the six months to end December, but was down by 24.7 percent year earlier.

The interim dividend payment comes after the group did not declare a final dividend for the year to end June, given the prevailing guidance from the Prudential Authority due to the Covid-19 outbreak.

FirstRand reported a 21 percent fall in normalised earnings to R11.04 billion, with normalised return on equity reduced from 21.2 percent to from 146c declared

a15.6 percent due to increased an credit impairment charge, lower endowment and lower levels of transactional activity. Its basic and diluted headline earnings per share (Heps) declined by 20 percent to 198.9c while impairment charge increased by 59 percent to R9.41bn during the period compared to R5.93bn a year earlier. But the impairment charge was much lower than the R18.45bn reported in June.

But the group said when comparing the period with the six months to end June, which included the first three months of the lockdown, there were indications of a positive rebound.

Chief executive Alan Pullinger said earnings had recovered faster than expected since June, driven by a better-than-significant rebound in the economy.

Its net interest income (NII) increased by 0.39 percent to R32.02bn while non-interest revenue (NIR) declined by 1 percent to R22.43bn.

FirstRand's portfolio consists of underlying businesses, which includes FNB, RMB, WesBank and Aldermore. Its underlying businesses reported a 1 percent decline in operating profit to R25bn, driven by operational resilience and the validation of certain ongoing strategies.

FirstRand’s shares closed 2.54 percent higher at R53.62 on the JSE yesterday.