Group overview

The FirstRand Banking Group PROVIDES CUSTOMERS WITH A COMPREHENSIVE RANGE OF PRODUCTS AND SERVICES ACCORDING to specific target market segments.

The Banking Group’s results for the year ended 30 June 2010 reflect a significant recovery in profitability in comparison to the prior year, with normalised earnings increasing by 41% to R8,54 billion.

Year ended 30 June

R million	2010	2009	% change
Retail Banking	3 630	1 747	>100
–  FNB Retail, FNB Africa, WesBank
Corporate Banking	2 150	2 847	-24
–  FNB Corporate, FNB Commercial, WesBank
Investment Banking	3 261	1 536	>100
–  RMB
Corporate centre, consolidation and IRFS adjust	(506)	(74)	(>100)
FirstRand Banking Group	8 535	6 056	+41

Such recovery in earnings was driven mainly by a modest increase in top-line revenue and the reversal of the two most significant negative issues from the previous comparative period, being bad debts emanating from the large retail lending books and losses from certain offshore trading portfolios within the investment bank. Many of the banking operations also showed strong operational performances and a significant private equity realisation positively impacted earnings.

Overall, impairments decreased by 29% from R8,0 billion to R5,7 billion, primarily in the retail franchises of FNB and WesBank, reflecting the positive benefits of the lower interest rate environment. In addition non interest-revenue increased by 32 % from R20 billion to R26 billion representing a strong recovery in RMB’s trading activities and the realisation of the private equity investment in Life Healthcare, which produced a R1,2 billion pre tax profit. However, the net interest income component of the earnings base remained under pressure, mainly due to declining asset growth and the negative impact of lower interest rates on capital and endowment balances. This was, however, partly offset by successful re-pricing strategies across all lending portfolios.