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FirstRand profit little changed as South African growth slows

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CAPE TOWN / Bloomberg

FirstRand Ltd., Africa’s biggest bank by value, said first-half profit was little changed after South Africa’s economy slowed and non-performing loans increased.
Net income rose to 10.48 billion rand ($683 million) in the six months ended December 31 from 10.3 billion rand a year earlier, the Johannesburg-based company said in a statement on Tuesday. Earnings per share excluding one-time items climbed 3 percent to 1.85 rand and the dividend increased to 1.08 rand a share from 0.93 rand. Non-performing loans increased 8 percent.
FirstRand, with operations in nine African countries, runs a consumer bank, a vehicle-financing unit, an asset manager and an investment bank. It has steered away from acquiring assets, choosing to grow organically across the continent in countries like Nigeria and Zambia where the economies were expanding faster than those of developed nations. Its four units work together to try service the same clients and manage the risks associated with lending, especially in its home market where the economy has slowed.
In the second half “advances growth is likely to decline, as further cuts are made given the deteriorating outlook, and corporate activity is unlikely to pick up significantly,” FirstRand said in the statement. “Retail and corporate bad debts are likely to increase further in the second half.”
FirstRand Limited, also referred to as FirstRand Group is the holding company of FirstRand Bank, and is a financial services provider in South Africa. It is one of the financial services providers licensed by the Reserve Bank of South Africa, the national banking regulator.
The FirstRand Group’s history traces back to the 1970s as an investment bank. The Group as currently is was established on April 1, 1998, through a merger of the financial services interests of Anglo American Corporation of South Africa Limited (now Anglo American plc) and RMB Holdings (RMBH) in order to achieve the objective of a unified financial services grouping.

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