FirstRand Confirms Smartphone App favour customers the over internet banking

FirstRand’s interim results released on Tuesday morning showed.

Mobile banking. Picture: ISTOCK

FirstRand said the number of transactions done via the internet at retail banking arm First National Bank (FNB) declined by 1% to 104-million, while banking app transactions jumped 66% to 73.6-million and mobile payments grew 3% to 22.8-million.

The results statement did not provide figures for how many account holders FNB has, but said its

"consumer" customers grew 1%, its "premium" customers grew 12%, and its "commercial" customers grew 7%.

FirstRand raised its interim dividend by 9% to R1.30 for the six months to end-December from R1.19 in the corresponding period in 2016.

In contrast to other banks, which segment themselves into retail and business banking (RBB), corporate and investment banking (CIB), and wealth and investment management (WIM), FirstRand makes each of these an individually branded subsidiary.

Its RBB division is split between FNB and vehicle financier WesBank, its CIB division is Rand Merchant Bank (RMB), and its WIM division mainly falls under Ashburton Investments.

In its interim results released on Tuesday morning, the group provided a breakdown of normalised earnings for its different units.

FirstRand’s overall normalised earnings grew 7% to R12.5bn, with 57% of this contributed by FNB South Africa.

Its South African retail bank grew its earnings contribution by 12% to R7.1bn.

FNB’s branches in the rest of Africa excluding SA grew their earnings 16% to R67m, contributing just 1% of the total.

"FNB’s rest of Africa portfolio represents a mix of mature businesses with significant scale and market share, such as Namibia and Botswana, combined with newly established and start-up businesses, such as Mozambique, Zambia, Tanzania and Ghana," the company said in its results statement.

"Whilst the portfolio has shown some recovery in the period under review, these businesses continue to face macro headwinds and regulatory challenges. The continued investment drag on the back of the organic build-out strategies continues to place pressure on current performance."

RMB grew its earnings contribution 11% to R3bn, contributing 25% of the total.

WesBank suffered a 1.5% decline in earnings contribution to R1.9bn, contributing 15% of the total.

"WesBank’s performance showed a mixed picture. The South African vehicle asset financing business experienced a tough six months on the back of worse than expected arrears and non-performing loans, however, the personal loans and corporate business performed strongly and [UK subsidiary] MotoNovo delivered a solid performance."

In November, FirstRand stepped up its activities in the UK by proposing to acquire Aldermore for about R20bn.

"Currently, 4% of total group earnings is generated by the group’s UK business MotoNovo, one of the largest providers of motor finance for second-hand vehicles in the country. The success of this business, since it was acquired in 2006, can largely be attributed to the introduction of WesBank’s operating model," the company said.

"FirstRand, however, believes that MotoNovo is currently undiversified from a product and market perspective and the acquisition of Aldermore will accelerate the diversification process using the strength of Aldermore’s position in the small business, mortgage and savings markets."

Businesslive