Future outlook

OUTLOOK FOR THE COMING YEAR

We remain hopeful that the South African economic environment has stabilised.

Whilst top line revenue growth in the financial services sector will remain challenging over the medium term, the retail credit environment is expected to continue to improve. Bad debts will continue to unwind, which will continue to provide support to the current earnings recovery in the Group’s retail banking franchises. However, growth in retail advances will remain low as levels of consumer indebtedness are still at historic highs. Corporate balance sheets remain strong and have weathered the cycle well. However, in the current environment investment opportunities remain limited and therefore corporate advances will remain subdued.

All the companies in which RMBH holds an interest continue to invest in their infrastructure in South Africa, particularly where significant growth opportunities have been identified.

FirstRand continues to focus on growing its footprint and building its client franchise in selected African markets. In addition to such investment strategies, given the anticipated pressures on top-line growth, FirstRand’s operating franchises continue to focus on cost efficiency.

Both Discovery and OUTsurance are well positioned in their respective market segments and should continue to extract superior growth. Their respective international initiatives should also begin to gain traction during the current year. We believe the combination of their current growth strategies and the quality of their underlying client franchises will allow the groups in which RMBH are invested to take full advantage of any major improvements in the cycle.

We believe the combination of their current growth strategies and the quality of their underlying client franchises will allow the groups in which RMBH are invested to take full advantage of any major improvements in the cycle.