| Tue 2 Sep 2008, 11:00 | | FSR - FirstRand - Voluntary Trading Update |
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FSR
FSR
FSR - FirstRand - Voluntary Trading Update
FirstRand Limited
(Incorporated in the Republic of South Africa)
Registration number: 1966/010753/06
JSE Share Code: FSR & NSX Share Code: FST
ISIN: ZAE000066304
("FirstRand" or "the Group")
VOLUNTARY TRADING UPDATE
This voluntary trading update follows the previous update issued by FirstRand
Limited (FirstRand) on 30 May 2008. In that update the Group highlighted to
shareholders that the deteriorating macro conditions, both domestically and
globally, would result in a more challenging operating environment for its
banking businesses. At the time, the Group stated that, to the year to June
2008, bad debt levels in its retail portfolios were trending up rapidly and bad
debts in total would be between 130 and 145bps, this remains unchanged but is
expected to be at the lower end of the range.
WesBank has decided to write down in the current year all the operating assets
associated with the exit from its lending businesses in Australia. This,
combined with a further increase in its bad debt levels has resulted in a
further reduction in WesBank`s earnings. The Group still expects the net result
from the planned sale of Worldmark to largely off-set the losses incurred from
its Australian investments but the full extent will only be reflected in the
financial year to June 2009.
The Group also decided to accelerate the process of de-risking and scaling back
Rand Merchant Bank`s (RMB) international equity portfolio, given the worsening
market conditions. This resulted in a further write-down of the carrying values
of certain assets.
These additional write-downs were not anticipated at the time of the issue of
the 30 May 2008 trading update. In addition, certain Private Equity disposals,
that were expected to receive approval from the Competition Tribunal in the year
to June 2008, were only finalised in July 2008. As a result the anticipated
earnings from these disposals are not included in RMB`s June 2008 results.
The above issues have further negatively impacted the Group`s earnings for the
financial year to 30 June 2008. Accordingly shareholders are advised that
FirstRand`s 2008 actual earnings per share (2007 - 222.9 cps: R11.5 billion),
actual headline earnings per share (2007 - 210.2 cps: R10.8 billion) and diluted
pro forma normalised earnings per share, following the unbundling of Discovery
(2007 - 200.6 cps: R11.3 billion) are all expected to be lower than the previous
year, but by not more than 10%.
The information on which this trading update is based has not been reviewed or
reported on by FirstRand`s auditors.
Sandton
2 September 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 02/09/2008 11:00:04 Produced by the JSE SENS Department.
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