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FSR FSRP FSPP
FSR
FSRP/FSPP - FirstRand Limited - Trading Statement - June 2010
FirstRand Limited
(Incorporated in South Africa)
(Registration number 1966/010753/06)
JSE "B" Preference Share Code: FSRP
JSE ISIN: ZAE000060141
JSE "B1" Preference Share Code: FSPP
JSE ISIN: ZAE000070900
("FirstRand" or "the Group")
TRADING STATEMENT - JUNE 2010
When announcing results for the six month period to December 2009, FirstRand
indicated to shareholders that the Group expected its operating environment to
remain challenging for the remainder of the financial year to June 2010.
As expected, revenue from banking activities remained under pressure. Net
interest income in particular continued to be subdued as a result of low levels
of borrowing due to the continued high indebtedness levels amongst retail
customers. Corporate lending also remained at relatively low levels.
Although decreasing interest rates have provided some relief to households, the
negative endowment income on deposits and capital has been significant.
Bad debts have continued to reduce in line with expectations. The Group
previously indicated to shareholders a credit loss ratio range of 140bps to
150bps for the year to June 2010 (compared to 181bps in the year to June 2009)
and now expects to report at the bottom end of this range. As a result of the
improvement in bad debts; WesBank`s earnings have recovered strongly, the losses
at FNB Homeloans are reducing significantly and FNB Card has returned to
profitability.
The Equity Trading division of RMB division will be profitable for the 12 months
to June 2010, representing a significant turnaround from the losses of R782
million incurred in the comparative year.
Momentum Group Limited ("Momentum") has benefited from an improvement in equity
markets and a strong performance from FNB Life.
The recently announced listing of Life Healthcare Group Holdings Limited ("Life
Healthcare") has resulted in RMB and Momentum disposing of their respective
shareholdings. The RMB shareholding represented an investment by its Private
Equity division and this realisation will result in a net profit of
approximately R800 million which will be included in the normalised earnings of
FirstRand. The Momentum shareholding is held in policyholder portfolios, and as
such will have no direct impact on Group earnings.
The table below shows the guidance for the increase in the Group`s Earnings Per
Share ("EPS"), Headline Earnings Per Share ("HEPS") and diluted normalised EPS
for the year to June 2010.
12 months Earnings
to June guidance
2009 for the 12
months to June
2010
Actual EPS 124.9 34 - 44%
Actual HEPS 133.3 27 - 37%
Diluted normalised EPS 126.8 32 - 42%
Excluding the proceeds from the Life Healthcare realisation, diluted normalised
EPS is expected to be between 20% - 30% higher than the comparative period.
The financial information on which this trading statement is based has not been
reviewed or reported on by FirstRand`s auditors.
Details of FirstRand`s results for the year ending June 2010 are expected to be
released on SENS and published in the press on or about 14 September 2010.
Sandton
10 June 2010
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 10/06/2010 11:08:02 Produced by the JSE SENS Department.
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