FirstRand Limited, a South African financial services group led by renowned banking executive Alan Pullinger, delivered a strong financial performance at the end of its 2022 fiscal year, with its profit exceeding $2 billion thanks to a strong performance across all its operating segments.
According to the group’s recently published annual report, its profit at the end of the 2022 fiscal year rose by 22.3 percent to R34.64 billion ($1.97 billion), up from R28.31 billion ($1.61 billion) the previous year.
FirstRand stated that the increase in earnings was driven primarily by a rebound in non-interest revenue, a lower cost of credit due to origination strategies, and the group’s continued post-pandemic recovery across the jurisdictions in which it operates.
As a result of the robust financial results, the banking group’s board announced the highest annual dividend in its history of R3.42 ($0.1948) per share, as well as a special dividend of R1.25 ($0.071) per share, resulting in a total distribution to shareholders of R26.2 billion ($1.49 billion).
In reaction to the announcement, FirstRand shares on the Johannesburg Stock Exchange increased 3.12 percent to R66.4 ($3.78) from R64.39 ($3.66) at the opening of the local bourse this morning.
The market value of Pullinger’s 0.1-percent stake in FirstRand rose by more than half a million dollars as a result of the price increase, from $20.6 million at the opening of the Johannesburg Stock Exchange this morning to $21.3 million at the time of writing this report.
Pullinger, FirstRand’s CEO, said the group’s performance reflects the quality of its operating businesses — FNB, RMB, WesBank, and Aldermore — as well as its disciplined strategy execution, which has continued to drive shareholder value.
“Earnings have fully recovered and are significantly above peak 2019 levels, economic profits have more than doubled, and the ROE, which is presently at 20.6 percent, remains well situated in the target range,” he said.
Due to the strong financial results, the group’s total assets surpassed R2 trillion ($114 billion), making it the first South African bank to do so, up from R1.87 trillion ($106.6 billion) last year. Meanwhile, its retained earnings increased from R143.6 billion ($8.19 billion) to R156.8 billion ($8.94 billion).