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FSR - FirstRand - Voluntary Trading Update

Release Date: 02/09/2008 11:00
Code(s): FSR
Wrap Text

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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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