FirstRand reports 10% rise in headline earnings despite UK motor commission provisions

FIRSTRAND increased headline earnings per share by 10% to 748.8 cents in the year to June 30 despite a further R2.7 billion provision for the motor commission legal issue in the UK.

- EDWARD WEST

The dividend was raised 12% to 466 cents a share. Normalised net asset value per share was up 11% to 3,884.1 cents. The return on equity increased marginally to 20.2% from 20.1%.

A consistent approach to new business origination and disciplined financial resources allocation resulted in a strong operational performance, in spite of macroeconomic challenges - all its large domestic businesses delivered “high-quality growth in earnings,’ said Group CEO Mary Vilakazi.

She said in a telephone interview this enabled the group to absorb the impact of a further pretax accounting provision of R2.7bn for the previously disclosed UK motor commission matter. This compares to R3bn raised in the prior year. In addition, a further R253 million of legal and professional fees were incurred.

Vilakazi said that “based on what we know," they were “hopeful” of not having to make any more provisions on this matter.