FirstRand delivers 10% earnings rise despite almost R3bn provision for UK car loan probe

Motheo Khoaripe (in for Stephen Grootes) interviews FirstRand Group CEO Mary Vilakazi on The Money Show.

FirstRand has reported a strong operational performance for the year to end-June 2025, despite what it says are ongoing macroeconomic challenges in the jurisdictions where the group operates.

Its portfolio of integrated financial services businesses includes FNB, WesBank and RMB.

The group says its full-year performance enabled it to absorb the impact of a further pre-tax accounting provision of R2.7 billion relating to the investigation in the UK into the vehicle finance market (compared to R3 billion raised in the prior year).

Despite this provision, normalised earnings increased 10%, to R41.8 billion.

Headline earnings were also up 10% to 748.8 cents a share.

The group also delivered a normalised ROE (return on equity) of 20.2%, which it says remains well within the stated range of 18% to 22%. 

Net income after cost of capital (NIACC) grew 12% to R11.6 billion, with net asset value increasing 11%.

FirstRand declared an ordinary dividend per share of 466 cents a share, 12% up on the previous year.

Group CEO Mary Vilakazi described the set of results as solid, given what they had to navigate.

"Earnings were up 16% which allowed us to take an additional provision for the UK motor commission matter, so to land at 10% up with ROE at 20.2% is pretty decent... and testament I think to the quality of the customer franchises and the brands we have in the group."

Mary Vilakazi, CEO - FirstRand Group

While Vilakazi highlights the drop in inflation and interest rates somewhat easing the pressure on South African consumers, she says FirstRand's view is that a repo rate at 7% is still quite high.

"That's not an environment where, particularly on the lending side we're going to have significant growth. But we are quite opt about the environment from 2027, IF inflation expectations can be managed lower."

Mary Vilakazi, CEO - FirstRand Group

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