Wrap Text
Unaudited interim results and cash dividend declaration for the six months ended 31 December 2015
FirstRand Limited
(Incorporated in the Republic of South Africa)
Registration number: 1966/010753/06
JSE Ordinary Share Code: FSR
JSE Ordinary Share ISIN: ZAE000066304
JSE B Preference Share Code: FSRP
JSE B Preference Share ISIN: ZAE000060141
NSX Ordinary Share Code: FST
(FirstRand or the group)
UNAUDITED INTERIM RESULTS AND CASH DIVIDEND DECLARATION
for the six months ended 31 December 2015
INTRODUCTION
This announcement covers the unaudited financial results of FirstRand Limited (FirstRand or the group) based on International Financial Reporting Standards
(IFRS) for the six months ended 31 December 2015. The primary results and accompanying commentary are presented on a normalised basis as the group
believes this most accurately reflects its economic performance. The normalised results have been derived from the IFRS financial results.
Normalised results include a condensed consolidated income statement, statement of comprehensive income, statement of financial position, statement of cash
flows and a statement of changes in equity. A detailed description of the difference between normalised and IFRS results is provided on www.firstrand.co.za.
Jaco van Wyk, CA(SA), supervised the preparation of the condensed consolidated financial results.
FINANCIAL HIGHLIGHTS
Six months ended Year ended
31 December 30 June
2015 2014 % change 2015
Normalised earnings (R million) 10 915 9 993 9 21 286
Diluted normalised earnings per share (cents) 194.6 177.3 10 378.5
Normalised net asset value per share (cents) 1 709.2 1 519.6 12 1 618.3
Dividend per ordinary share (cents) 108.0 93.0 16 210.0
Normalised ROE (%) 23.4 24.0 24.7
The group consists of a portfolio of leading financial services franchises; these are First National Bank (FNB), the retail and commercial bank, Rand Merchant
Bank (RMB), the corporate and investment bank, WesBank, the instalment finance business and Ashburton Investments, the group's investment management
business.
STATEMENT OF HEADLINE EARNINGS - IFRS
Six months ended Year ended
31 December 30 June
R million 2015 2014 % change 2015
Profit for the period 11 278 11 131 1 23 124
Non-controlling interests (634) (674) (6) (1 191)
NCNR preference shareholders (164) (153) 7 (310)
Earnings attributable to ordinary equityholders 10 480 10 304 2 21 623
Adjusted for: (81) (403) (80) (482)
(Gain)/loss on disposal of investment securities and other investments of a
capital nature (5) - 1
Loss/(gain) on disposal of available-for-sale assets 2 (227) (293)
Transfer to foreign currency translation reserve - - 10
Gain on disposal of investments in subsidiaries (1) (188) (220)
(Gain)/loss on the disposal of property and equipment (78) (11) 5
Fair value movement on investment properties - - (33)
Other - 1 -
Tax effects of adjustments 1 - 18
Non-controlling interests adjustments - 22 30
Headline earnings 10 399 9 901 5 21 141
RECONCILIATION FROM HEADLINE TO NORMALISED EARNINGS
Six months ended Year ended
31 December 30 June
R million 2015 2014 % change 2015
Headline earnings 10 399 9 901 5 21 141
Adjusted for: 516 92 >100 145
Total return swap and IFRS 2 liability remeasurement* 569 (144) (>100) (34)
IFRS 2 share-based payment expense - 75 (100) 75
Treasury shares** (1) 49 (>100) 25
IAS 19 adjustment (53) (54) (2) (107)
Private equity subsidiary realisations 1 166 (99) 186
Normalised earnings 10 915 9 993 9 21 286
* The group uses a total return swap (TRS) with external parties to economically hedge itself against the exposure to changes in the FirstRand share price
associated with the group's long-term incentive schemes.
The TRS is accounted for as a derivative in terms of IFRS, with the full fair value change recognised in NIR.
In the current period, the share price declined R10.95. During the period ended 31 December 2014, the group's share price increased R9.82.
This resulted in a significant mark-to-market fair value loss in the current period (compared to a profit in the prior year) being included in the group's IFRS
attributable earnings. The normalised results reflect the adjustment to normalise this period-on-period IFRS fair value volatility from the TRS.
** Includes FirstRand shares held for client trading activities.
PRESENTATION
BASIS OF PRESENTATION
FirstRand prepares its condensed consolidated financial results in accordance with:
- recognition and measurement requirements of IFRS;
- presentation and disclosure requirements of IAS 34 Interim Financial Reporting;
- SAICA Financial Reporting Guides as issued by the Accounting Practices Committee;
- Financial Reporting Pronouncements as issued by Financial Reporting Standards Council; and
- requirements of the Companies Act 71 of 2008.
This announcement does not include information pursuant to paragraph 16A(j) of IAS 34. The full report which contains these disclosures is available at www.
firstrand.co.za or from the registered office upon request.
The results are prepared in accordance with the going concern principle under the historical cost basis as modified by the fair value accounting of certain assets
and liabilities where required or permitted by IFRS.
The accounting policies applied in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those
accounting policies applied in the preparation of the previous consolidated annual financial statements. There were no new standards and interpretations which
became effective for the first time in the current financial period.
The condensed consolidated results for the six months ended 31 December 2015 have not been audited or independently reviewed by the group's external
auditors.
The group believes normalised earnings more accurately reflect its economic performance. Headline earnings are adjusted to take into account non-operational
items and accounting anomalies.
Details of the nature of these adjustments and the reasons therefore can be found on www.firstrand.co.za
REGULATORY CHANGES
The group has been actively managing its balance sheet since the implementation of the liquidity coverage ratio (LCR) requirements. Under the Basel III liquidity
regime, securities that meet the criteria set out in the standard are designated as HQLA. There are operational requirements to be fulfilled with respect to HQLA
requiring that the assets need to be under management control of the business unit/area charged with the management of liquidity.
For normalised reporting in the current and prior periods, certain investment securities have been reclassified into advances. The investment securities reclassified
include debt securities qualifying as HQLA, securitisation notes and other corporate bonds that do not qualify as HQLA.
The segment report is, therefore, also impacted as HQLA and securitisation notes are managed by the Group Treasurer and are included in the FCC (including
Group Treasury) segment. Corporate bonds that do not qualify as HQLA remain in the RMB investment banking segment.
The table below shows these adjustments.
CREDIT-BASED INVESTMENT ADJUSTMENTS
December June
R million 2015 2014 2015
Normalised advances excluding credit-related assets 810 429 736 454 765 951
Credit-related assets
- Corporate bonds 9 103 18 725* 11 218
- HQLA (corporate advances) 15 280 - 9 494
- Securitisation notes 9 879 - 7 301
Restated normalised advances 844 691 755 179 793 964
NPLs as a % of advances
- Excluding credit-related assets 2.39 2.44 2.28
- Including credit-related assets 2.30 2.38 2.21
Impairment charge as a % of average advances
- Excluding credit-related assets 0.80 0.84 0.78
- Including credit-related assets 0.77 0.84 0.77
* R10 710 million of these corporate bonds qualified as HQLA with effect from 1 January 2015.
OVERVIEW OF RESULTS
INTRODUCTION
The South African economy was further negatively impacted by significant internal and external pressures during the period under review, including:
- Global commodity prices falling on the back of slowing growth in China.
- The first interest rate increase by the US Federal Reserve in nine years resulted in significant outflows of foreign capital from emerging markets, including South
Africa.
- The euro zone provided limited support to South African exports.
- Domestic household consumption continued to be impacted by higher interest rates, rising inflation and moderating levels of income growth.
- Reduced growth in government spending to stabilise public sector debt and protect the country's sovereign credit rating from the elevated risk of a
downgrade.
The central bank continues to implement a gradual and moderate hiking cycle, but the economy remains vulnerable to a more aggressive approach should
capital inflows slow down or reverse. The currency remains weak having devalued 25% during the period.
Sub-Saharan economies were also negatively affected by these global developments with the Nigerian, Zambian and Ghanaian economies weakening markedly.
Economic growth has also slowed in Namibia and Botswana.
OVERVIEW OF RESULTS
Against this challenging economic backdrop, FirstRand grew normalised earnings 9% and produced an ROE of 23.4% for the six months to December 2015.
The group's operating franchises continued to produce resilient operating performances, although absolute levels of growth are trending down as the more
difficult economic cycle emerges. FNB continued to grow its topline and profits on the back of sustained momentum in NII with strong growth still generated from
both advances and deposits, although NIR moderated including the impact of the reduction in interchange fees.
WesBank's domestic franchise benefited from consistent new business volumes despite the subdued local retail credit cycle, however, its MotoNovo business in
the UK continued to grow strongly in both rand and GBP terms.
RMB's private equity, investment banking and corporate transactional franchises underpinned a solid performance despite subdued corporate activity and
liquidity pressures. RMB remains very conservative in its credit provisioning.
The table below shows a breakdown of sources of normalised earnings.
SOURCES OF NORMALISED EARNINGS
Six months ended 31 December Year ended 30 June
% % %
R million 2015 composition 2014 composition % change 2015 composition
FNB 6 208 57 5 674 57 9 11 299 53
RMB 2 805 26 2 449 25 15 5 758 27
WesBank 1 856 17 1 619 16 15 3 307 16
FCC (including Group Treasury)
and other*,** 210 2 404 4 (48) 1 232 6
NCNR preference dividend (164) (2) (153) (2) 7 (310) (2)
Normalised earnings 10 915 100 9 993 100 9 21 286 100
* Includes FirstRand Limited (company).
** Includes year-on-year negative accounting mismatches primarily reflected in the nominal NII growth of the group.
Note: During the reporting period the group refined the franchise segmentation of its African operations to more accurately reflect the respective franchise
contributions. Comparative numbers have been restated.
The group's NII increased 9%, benefiting from the ongoing growth in advances (+12%) and deposits (+12%). Despite the benefit of increased endowment, overall
NII growth was negatively impacted by the continued pressure on margins from higher term funding and liquidity costs, as well as the negative impact of
increased levels of HQLA following the introduction of LCR on 1 January 2015. Accounting mismatches in excess of R400 million relating to certain interest rate
hedging strategies and term funding instruments also negatively impacted reported NII (due to fair value movements), although the majority of these negative
impacts will reverse in future reporting periods.
Group NIR growth of 5% reflects a muted performance from FNB mainly due to the regulatory impact of interchange reduction. Whilst absolute volumes
remained robust, fee levels were lower due to deliberate strategies to migrate customers onto electronic channels. WesBank produced satisfactory NIR growth
on the back of new business volumes and insurance revenue streams. RMB's investing activities also positively impacted group NIR including realisation profits
from the private equity portfolio in excess of R1 billion.
Overall operating cost growth was 8% for the period compared to 12% in the comparative period and down from 10% at June. This trend reflects lower growth
in variable staff costs directly related to lower income generation, although fixed staff costs increased 12%. The group continues to invest in infrastructure,
operating footprint and initiatives to satisfy increased regulatory requirements. The cost to income ratio increased marginally to 51.1% (December 2014: 50.8%).
NPLs increased 8% year-on-year, however, on a rolling six-months basis these increased 11% reflecting the continued deterioration in the credit cycle, as well as
the effects of strong growth in most of the major retail books. In addition, pressure on commodity prices is creating increased risk in a small component of
RMB's corporate lending book, particularly certain South African resources counters, and oil and gas exposures in the rest of Africa. The group is comfortable
with the relative size of these exposures, which represent 2.2% of the performing CIB advances book.
The group also remains comfortable with the agricultural component of its commercial lending book. The portfolio is well diversified across regions and
commodities and is weighted towards large commercial farmers with strong balance sheets. Drought-affected exposures represent approximately 7% of the total
commercial book.
The group's total impairment coverage ratio reduced marginally to 83.3% reflecting a change in NPL mix, however, both specific and portfolio provisions
increased.
The group continues to exercise prudence with overall portfolio provisions being maintained, despite some deterioration in the underlying portfolios, including
increasing NPLs, which was expected.
As in the prior year, once the underlying operating franchise models reflect the anticipated deterioration in the form of higher arrears levels and NPLs, the relevant
portion of the central overlay is released. In the period under review, R165 million has been released (December 2014: R150 million), with central overlays now
amounting to R760 million. Whilst the group's performing book coverage ratio declined marginally on the back of these changes, it still remains above the current
annual charge.
FRANCHISE PERFORMANCE REVIEW
Below is a brief overview of the financial and operational performance of each group franchise.
FNB
FNB represents FirstRand's activities in the retail and commercial segments in South Africa and the broader African continent. It is growing its franchise strongly
in both existing and new markets on the back of innovative products and delivery channels, particularly focusing on electronic and digital platforms.
FNB FINANCIAL HIGHLIGHTS
Six months Year
ended ended
31 December 30 June
%
R million 2015 2014 change 2015
Normalised earnings 6 208 5 674 9 11 299
Normalised profit before tax 9 040 8 245 10 16 416
Total assets 362 909 323 645 12 341 302
Total liabilities 354 400 315 724 12 326 322
NPLs (%) 2.69 2.88 2.66
Credit loss ratio (%) 0.95 0.89 0.79
ROE (%) 40.5 41.8 40.1
ROA (%) 3.52 3.56 3.45
Cost-to-income ratio (%) 53.0 53.3 54.6
Advances margin (%) 3.79 3.66 3.74
SEGMENT RESULTS
Six months Year
ended ended
31 December 30 June
%
R million 2015 2014 change 2015
Normalised PBT
Retail 5 423 4 905 11 9 752
FNB Africa 771 853 (10) 1 621
Commercial 2 846 2 487 14 5 043
Total FNB 9 040 8 245 10 16 416
FNB grew pre-tax profits 10%, driven by a resilient operational performance despite increasing economic and regulatory headwinds and achieved an ROE of
40.5%, which remains well above hurdle rates.
These results reflect the quality of FNB's transactional franchise, its continued focus on targeted asset growth and significant momentum in its liability franchise. It
also reflects the success of FNB's ongoing strategy to grow and retain core transactional accounts, cross-sell and up-sell into the customer base, apply
disciplined origination strategies and provide innovative transactional and savings products. FNB's cross-sell ratio improved to 2.63, a 10% year-on-year
improvement.
FNB's overall NII increased 16% driven by growth in both advances (+11%) and deposits (+14%) and the positive endowment effect from the two 25 bps
increases in the repo rate in July and November 2015.
The retail lending businesses continued to show above market growth driven by the activation of digital channels to enable FNB's strategy to cross-sell and
up-sell products into the existing customer base. Deposits also grew well above market on the back of ongoing acquisition of core transactional accounts and
further strong momentum in sales of new products, in particular the money market maximiser. The commercial segment also showed good account growth of
10% with advances increasing 18%.
SEGMENT ANALYSIS OF ADVANCES AND DEPOSIT GROWTH
31 December 2015
vs 31 December 2014
Deposit growth Advances growth
Segments % R billion % R billion
Retail 14 20.8 8 18.0
FNB Africa 14 4.2 22 7.4
Commercial 14 20.7 18 9.3
As expected, bad debts and NPLs have started to trend up following strong book growth in previous periods. Given the worsening economic cycle, FNB is
closely monitoring vintages and arrears levels and ongoing adjustments to credit appetite have continued across the portfolio. Overall provisioning levels have
remained conservative with overlays maintained. Utilisation of certain overlays is expected to start in the second half of the year.
NIR growth was modest reflecting the year-on-year reduction in interchange fees of >R300 million, which became effective in March 2015. Fee and commission
income held up well despite pressures on consumers' disposable income with volume growth of 13% achieved across the electronic channels. This growth was
driven by FNB's ongoing electronic migration strategy, and has, to some extent, offset the impact of interchange.
Cost growth in the South African business was well contained at 7%, however, total costs grew 9% on the back of continued investment in the rest of Africa
expansion strategy.
Profits from FNB's African subsidiaries declined 10% year-on-year driven by poor performances from Botswana and Mozambique as well as the impact of the
start-up operations in Ghana. Zambia and Tanzania continued to rollout operating footprint and products. The group finalised its African segmentation in the
current year, and at a total portfolio level the profit increased 5%.
With regards to progress on current new initiatives, during the period under review FNB launched two new products to customers on FirstRand's new life licence:
a credit life product (on personal loans) and an Ashburton Investments private equity fund. FNB also successfully launched funeral product sales on the cell
phone and ATM platforms, and cell phones already contribute between 5% and 10% of overall funeral product sales.
In terms of early progress in FNB's campaign to cross-sell into the Direct Axis customer base, nearly 6 000 accounts were opened in the first six months.
RMB
RMB represents the group's activities in the corporate and investment banking segments in South Africa, the broader African continent and India. The business
strategy is anchored around its corporate clients and leverages a market-leading origination franchise to deliver an integrated corporate and investment banking
value proposition, combined with market making and distribution capabilities, a growing asset management solutions franchise and an excellent track record in
private equity investments. This strategy is underpinned by sound risk management, designed to effectively balance the relationship between profit growth,
returns and earnings volatility.
RMB FINANCIAL HIGHLIGHTS
Six months Year
ended ended
31 December 30 June
%
R million 2015 2014 change 2015
Normalised earnings 2 805 2 449 15 5 758
Normalised profit before tax 3 956 3 488 13 8 136
Total assets 466 348 411 474 13 415 702
Total liabilities 458 371 403 418 14 405 465
ROE (%) 22.2 20.5 24.4
ROA (%) 1.25 1.20 1.39
Credit loss ratio (%) 0.29 0.56 0.42
Cost-to-income ratio (%) 46.4 44.9 43.9
RMB produced solid results for the period with pre-tax profits increasing 13% to R4 billion and the business delivering a satisfactory ROE of 22.2%. This
performance was achieved against the backdrop of a challenging economic environment and highlights the resilience and diversification of RMB's portfolio of
businesses. RMB's balance sheet remains robust, with a high quality of earnings and solid operational leverage despite platform investments and increasing
regulatory and compliance spend.
Whilst RMB's organisational structure continues to be based on its four separate divisions, namely Investment Banking (IBD), Global Markets, Private Equity and
Corporate Banking, the business is managed on a core activity basis. The activity view was disclosed for the first time in June 2015 and is outlined further in the
table below.
In addition, during the period under review, the organisational business model has been further refined to more closely reflect the core activity view. All activities
relating to the corporate and transactional banking pillar have been grouped in the Corporate Banking business unit. These include the transactional banking,
trade and working capital, and global foreign exchange activities, some of which were previously reported in Global Markets.
The table below shows the financial performance in a matrix that integrates the amended business unit and core activity views.
BREAKDOWN OF PROFIT CONTRIBUTION BY ACTIVITY
Six months ended 31 December
Normalised PBT 2015 2014 %
R million IB&A C&TB M&S INV IM Other Total Total change
Global Markets - - 648 12 15 - 675 659 2
IBD 1 388 - 30 89 25 - 1 532 1 482 3
Private Equity 1 - - 1 306 - - 1 307 1 163 12
Other RMB (200) - - - - (166) (366) (540) (32)
Investment banking 1 189 - 678 1 407 40 (166) 3 148 2 764 14
Corporate banking - 808 - - - - 808 724 12
Total RMB - 2015 1 189 808 678 1 407 40 (166) 3 956 3 488 13
Total RMB - 2014 980 724 663 1 404 61 (344) 3 488
% change 21 12 2 - (34) (52) 13
Note:
IB&A - investment banking and advisory
C&TB - corporate and transactional banking
M&S - markets and structuring
INV - investing
IM - investment management
Investment banking and advisory activities continued to experience competitive market conditions, combined with a deteriorating macroeconomic backdrop.
These factors resulted in margin compression, and as a result of disciplined resource allocation, muted balance sheet growth. Additional credit impairments
raised against mining, and oil and gas exposures in the book, albeit at lower levels than the comparative period, impacted the results significantly. Given this
proactive provisioning, RMB maintained a strong portfolio coverage ratio as it enters a weak credit cycle. Income was, however, bolstered by strong fee income
as clients sought expansion opportunities in developed markets, providing the franchise with key advisory and underwriting mandates.
Corporate and transactional banking activity income has shown solid growth in the current period. The liability raising strategy yielded positive results with higher
average deposit balances and an enhanced liquidity profile. Earnings in trade and working capital benefited from increased demand for structured trade
advances whilst global foreign exchange revenues benefited from increased client flows in the African subsidiaries. Income growth was impacted by lower
traditional trade revenue due to the deteriorating macroeconomic environment, particularly in the oil producing African countries.
Markets and structuring activities delivered a solid performance, with foreign currency and commodities benefiting strongly from increased volatility, which drove
spreads wider and resulted in increased deal flow and client risk management opportunities. Revenue growth was, however, constrained by a specific credit
event related to a client impacted by recent foreign exchange volatility and adverse mark-to-market movements on fixed income positions.
RMB's investing activities delivered a resilient performance, also off a high base. Private Equity produced excellent results and continues to benefit from the
quality and diversity of its portfolio, reporting strong equity-accounted earnings and solid income from investment subsidiaries. Earnings were positively impacted
by significant realisations and, as such, the unrealised value of the portfolio marginally decreased to R4.5 billion (June 2015: R4.9 billion). Investment
management activities have seen a strong performance from fund solutions driven by higher assets under management (AUM). This was, however, offset by
reduced appetite for credit assets via the group's conduit programmes resulting in lower balance sheet growth and earnings from these platforms.
Unallocated franchise costs, endowment on capital invested, legacy portfolios and RMB Resources are reflected in other activities. The legacy portfolio realised a
loss of R24 million, compared to R44 million in the prior year. The RMB Resources business reported a loss of R129 million for the period (2014: loss of R353
million) with both the equity and debt portfolios remaining under pressure as a result of the downturn in the commodity cycle. As previously stated, RMB is
exiting these activities and is undertaking an orderly unwind of the portfolio with no new investments.
WESBANK
WesBank represents the group's activities in asset-based finance in the retail, commercial and corporate segments of South Africa and rest of Africa where
represented, and asset-based motor finance through MotoNovo Finance in the UK. Through the Direct Axis brand, WesBank also operates in the unsecured
lending market in South Africa. WesBank's leading position in its chosen markets is due to its long-standing alliances with leading motor manufacturers, suppliers
and dealer groups, and strong point-of-sale presence.
WESBANK FINANCIAL HIGHLIGHTS
Six months Year
ended ended
31 December 30 June
%
R million 2015 2014 change 2015
Normalised earnings 1 856 1 619 15 3 307
Normalised profit before tax 2 615 2 309 13 4 752
Total assets 212 621 187 948 13 193 613
Total liabilities 207 590 184 887 12 186 903
NPLs (%) 3.03 2.95 3.15
Credit loss ratio (%) 1.36 1.35 1.43
ROE (%) 20.5 21.8 21.0
ROA (%) 1.80 1.76 1.77
Cost-to-income ratio (%) 42.0 43.1 41.7
Net interest margin (%) 4.83 4.76 4.70
WesBank also delivered a resilient performance with ongoing solid growth in local new business volumes, combined with very strong growth in the UK business,
underpinning a 13% increase in pre-tax profits to R2.6 billion, an ROE of 20.5% and an ROA of 1.80%.
The table below shows the relative performance year-on-year of WesBank's activities.
BREAKDOWN OF PROFIT CONTRIBUTION BY ACTIVITY
Six months Year
ended ended
31 December 30 June
%
Normalised PBT 2015 2014 change 2015
VAF
- Retail SA 1 015 994 2 2 051
- Retail UK 681 429 59 937
- Corporate and commercial 238 211 13 398
Personal loans 637 630 1 1 271
WesBank Africa 44 45 (2) 95
Total WesBank 2 615 2 309 13 4 752
Despite showing growth in new business volumes across all of its local retail lending portfolios, WesBank's credit appetite remains disciplined with systemic
tightening continuing in higher risk segments. Overall production was up 11% with origination volumes up 7% in personal loans and 43% in MotoNovo (29% in
GBP terms). Local retail VAF's performance continues to be impacted by the pressures facing consumers, with advances fairly flat. WesBank's rest of Africa
advances continued to grow off a low base (+15%).
Overall interest margins have shown resilience despite higher funding and liquidity costs and the continued shift in mix from fixed- to floating-rate business.
As anticipated, bad debts in the local VAF portfolio are trending upwards but remain within WesBank's through-the-cycle thresholds and provisioning continues
to be conservatively applied. NPLs as a percentage of advances are up marginally and remain inflated by the high proportion of restructured debt review
accounts, most of which are still paying according to arrangement, have never defaulted or have balances lower than when entering debt review.
NIR, including income from associates, increased 8% mainly as a result of stronger inflows from insurance income in the VAF and personal loans portfolios as
well as fee income on the back of new business growth.
Growth in local core operating costs increased 8% and the cost-to-income ratio decreased over the period.
During the period under review, WesBank formalised its long-standing partnership with Hollard Insurance Company through the creation of MotoVantage, which
intends to become a significant player in the value-added insurance industry. MotoVantage will offer and develop new value-added vehicle insurance products for
consumers. This also provides opportunities for cross-sell and up-sell into both the existing and new customer base in the retail VAF portfolio.
The acquisition of Regent Insurance and Regent Life by Hollard and MotoVantage is well advanced and should be concluded by end of February 2016. This
acquisition will further enhance the VAPS (value added products and services) and insurance product offering within the MotoVantage portfolio.
The relative contribution to the group's normalised earnings mix and growth rates from types of income and business units is shown in the table below.
SEGMENT ANALYSIS OF NORMALISED EARNINGS
Six months ended 31 December Year ended 30 June
% contri- % contri- % % contri-
R million 2015 bution 2014 bution change 2015 bution
Retail 5 845 54 5 320 53 10 10 659 50
FNB 4 159 3 882 7 668
WesBank 1 686 1 438 2 991
Commercial 2 219 20 1 973 20 12 3 947 19
FNB 2 049 1 792 3 631
WesBank 170 181 316
Corporate and investment banking 2 805 26 2 449 25 15 5 758 27
RMB 2 805 2 449 5 758
Other 46 - 251 2 (82) 922 4
FirstRand and dividends paid on NCNR
preference shares (164) (153) (310)
FCC (including Group Treasury) and
consolidation adjustments 210 404 1 232
Normalised earnings 10 915 100 9 993 100 9 21 286 100
UPDATE ON INVESTMENT MANAGEMENT STRATEGY
The group has an organic strategy to grow the asset management and wealth and investment management franchises. Overall assets under management (AUM)
have grown 15% from R105 billion to R121 billion (excluding conduits).
The asset management business, Ashburton Investments (AI) comprises a wide range of component funds including index tracking, multi-asset, listed equity,
specialist equity, listed fixed income, specialist credit, private equity and hedge funds. The structured or guaranteed product solutions are currently delivered
through RMB Global Market Fund Solutions.
The largest contributor to the growth in AUM is AI which has grown 17% from R77 billion to R90 billion, an increase of R13 billion. Retail funds have shown solid
growth over the period. Credit co-investment fund flows and segregated credit mandates have added R5 billion in new flows over the period.
Despite a very tough year for global financial markets, investment performance for AI funds continues to show resilience with the majority of collective investment
scheme funds delivering performances that placed them in the top two quartiles of relative peer groups.
The wealth and investment management business includes portfolio management, stockbroking, share investing, and all investor platform-related administration
capabilities. There are two pillars to the strategy, both currently in build phase:
- a direct offering of asset management solutions/funds to the FNB client's base, through FNB's banking channels; and
- a bespoke offering of tailored portfolio management solutions to FNB's wealth advised clients.
Traction has been satisfactory in the period under review. Some highlights include:
- An increase in AUM in portfolio management from R38 billion to R42 billion; an increase of 11%.
- Growth in assets under administration on the LISP platform from R5.6 billion to R12 billion; an increase of >100% with customer numbers on the platform
increasing over 7 000.
- Growth in assets under execution in FNB Securities from R58 billion to R69 billion; an increase of 19%.
- Growth in assets under execution in FNB Share Investing from R7 billion to R10.5 billion; an increase of 43% with a growth in customer numbers of over
9 000.
ADJUSTMENT TO STRATEGIC FRAMEWORK
FirstRand's consistently stated long-term strategic objective is to deliver superior and sustainable economic returns to shareholders within acceptable levels of
volatility and maintain balance sheet strength. Against this background, given the global and regional challenges developing, the group has been through a review
process to assess if alternative strategic opportunities exist or should be considered to ensure value creation for shareholders over the medium to long term.
For the past decade, FirstRand has been focused on building a diversified and resilient portfolio of 'banking' businesses, namely retail and wholesale lending,
transactional activities and related endowment. This focus has resulted in the high quality lending and transactional franchises that currently reside in FNB, RMB
and WesBank.
Whilst continuing to protect and grow these banking franchises, FirstRand has also started to execute on strategies to grow in other profit pools in the broader
domestic financial services industry, namely insurance and investment management. The group is leveraging off existing group-wide resources, such as a strong
actuarial skills base, flexible electronic distribution platforms, client base, new licences and its track record of product innovation.
FirstRand remains fully committed to growing in the territories on the African continent where it already has established a physical presence. The risks in many of
these countries have elevated considerably, however, and initiatives will be reassessed within a revised risk/return framework.
In addition to the above, the group will actively evaluate whether certain of its business lines are appropriate for markets outside of Africa, such as the successful
deployment of WesBank's model through MotoNovo in the UK. Given the seemingly systemic macro pressures facing emerging markets, the group's view is that
over the medium term, developed market dynamics represent an attractive risk/return profile for shareholders.
As outlined below, FirstRand has subsequently adjusted its stated strategic framework to accommodate a broader set of growth opportunities, both from a
market, segment and geographic perspective.
FirstRand's portfolio of leading financial services franchises provides a universal set of transactional, lending, investment and insurance products and services.
The franchises operate in markets and segments where they can deliver competitive and differentiated client-centric value propositions, leveraging the relevant
distribution channels, product skills, licenses and operating platforms of the wider group.
Strategy is executed on the back of disruptive and innovative thinking, underpinned by an owner-manager culture combined with the disciplined allocation of
financial resources.
The group believes this approach will ensure sustainable and superior returns for shareholders.
MANAGEMENT OF FINANCIAL RESOURCES
The management of financial resources, defined as capital, funding and liquidity, and risk appetite, is critical to the achievement of FirstRand's stated growth and
return targets, and is driven by the group's overall risk appetite. As such, the group sets financial and prudential targets through different business cycles and
scenarios. The group is expected, at a defined confidence level, to deliver on its commitments to the providers of capital.
The management of the group's financial resources, is executed through Group Treasury and is independent of the operating franchises. This ensures the
required level of discipline is applied in the allocation of financial resources and pricing of these resources. This also ensures that Group Treasury's mandate is
aligned with the operating franchises' growth, return and volatility targets, in order to deliver shareholder value.
Given the high levels of uncertainty and volatility in funding markets, the group is exploring strategic options to protect its counterparty status. In addition, access
to hard-currency funding will be key to execution of the rest of Africa strategy and growing MotoNovo.
BALANCE SHEET STRENGTH
CAPITAL POSITION
Current targeted ranges and actual ratios are summarised below.
% CET1 Tier 1 Total
Regulatory minimum* 6.5 8.0 10.0
Targets 10.0 - 11.0 >12.0 >14.0
Actual** 13.7 14.4 16.6
* Excludes the bank-specific individual capital requirement.
** Includes unappropriated profits.
The group has maintained its strong capital position. Capital planning is undertaken on a three-year forward-looking basis, and the level and composition of
capital is determined taking into account business unit organic growth plans and stress-testing scenario outcomes. In addition, the group considers external
issues that could impact capital levels, which include regulatory and accounting changes, macroeconomic conditions and future outlook.
The group continues to actively manage capital composition and, to this end, issued R4.3 billion Basel III-compliant Tier 2 instruments during the past 12 months
(R2 billion in March 2015 and R2.3 billion in July 2015). This resulted in a more efficient composition, closely aligned with the group's internal targets, approved
by the board. It remains the group's intention to frequently issue these instruments at a level that not only supports ongoing growth, but also compensates for
the haircut applied to non-compliant Basel III Tier 2 instruments.
LIQUIDITY POSITION
Taking into account the liquidity risk introduced by its business activities, the group's objective is to optimise its funding profile within structural and regulatory
constraints to enable its franchises to operate in an efficient and sustainable manner. Liquidity buffers are actively managed via high quality liquid assets that are
available as protection against unexpected events or market disruptions. The quantum and composition of the available sources of liquidity are defined by the
behavioural funding liquidity at risk and the market liquidity depth of available liquidity resources. In addition, adaptive overlays to liquidity requirements are
derived from stress testing and scenario analysis of the cash inflows and outflows related to business franchise activity.
The group exceeds the 60% minimum liquidity coverage ratio as set out by the Basel Committee with an LCR for the group of 71% at 31 December 2015
(FirstRand Bank: 74%), holding available liquidity of R145 billion.
REGULATORY CHANGES
On 18 November 2015, the SARB released a proposed directive related to the Net Stable Funding Ratio (NSFR). The SARB believes that the Basel Committee
on Banking Supervision (BCBS) calibration does not reflect the actual stability of institutional funding in the SA context, given the significant barriers preventing
liquidity from leaving the domestic financial system. It has, therefore, proposed a 35% available stable funding factor for institutional funding less than six months
in tenor, compared to 0% under the BCBS framework. It is expected that this change will significantly assist the SA banking sector in meeting the NSFR
requirements without severely impacting the economy. FirstRand expects to be fully compliant with NSFR requirements on the new calibration.
DIVIDEND STRATEGY
Given the uncertainty around regulatory changes, the challenging operating environment and expected demand for capital, the group believes its current dividend
strategy remains appropriate. As previously stated, it considers the level of payout within a range of 1.8 x to 2.2 x and assesses the appropriateness of this on an
annual basis. The group has, therefore, decided to keep its interim dividend cover a 1.8 x for the six months to December 2015.
Year-on-year growth in dividend (+16%) is significantly higher than earnings growth as the group reduced its dividend cover at 30 June 2015 to 1.8 x, whereas at
31 December 2014 the cover was 1.9 x.
PROSPECTS
The second half of the year will continue to be characterised by higher inflation and low GDP growth. The SARB may have to increase rates again before the
end of 2016 and this will place further pressure on the South African consumer. Unemployment is trending upwards with retrenchments trending up across a
number of industry sectors.
Advances growth is likely to decline, as further cuts are made given the deteriorating outlook, and corporate activity is unlikely to pick up significantly. Retail and
corporate bad debts are likely to increase further in the second half. Transactional volumes are also expected to remain at similar levels which will put pressure on
the topline.
The group's strong balance sheet and the resilience and diversity of its diverse income streams should allow FirstRand to continue to deliver sustainable and
superior returns to shareholders.
MATURITY OF FIRSTRAND'S BEE TRANSACTION
On 31 December 2014, the staff and director components of FirstRand's 2005 Black Economic Empowerment (BEE) transaction matured. This resulted in
participants receiving a net benefit valued at R5.4 billion from the vesting of 107.5 million FirstRand ordinary shares and R560 million from the vesting of 17.8
million MMI Holdings Limited (MMI) shares. The shares were held by the FirstRand Black Employee Trust, the FirstRand Black Non-executive Directors Trust and
the Staff Assistance Trust (the trusts) after purchasing the FirstRand shares in the market in 2005 and receiving the MMI shares pursuant to the unbundling of
MMI in 2010.
To facilitate the wind-up of the trusts on maturity of the transaction, the group bought back 63 million FirstRand shares from the trusts.
To reinstate the normalised NAV, which was reduced by the share buy-back, the group reissued 35 million ordinary shares on 20 January 2015.
From an economic perspective, the reissue of the 35 million shares formed an integral part of the BEE unwind transaction and, as such, was included in the
group's normalised share capital, and NAV and related ratios from 31 December 2014 and for IFRS from 28 January 2015.
EVENTS AFTER THE REPORTING PERIOD
The directors are aware of the following material events that have occurred between the date of the statement of financial position and the date of this report:
- Ashburton Investments acquired Atlantic Asset Management on 1 January 2016 for R51 million. The acquisition includes R5 billion in assets under
management.
- At 30 June 2015 it was anticipated that Discovery Limited (Discovery) would subscribe for preference shares in FirstRand Bank Limited to increase its
participation in DiscoveryCard. As the cashflow occurred during the current period, Discovery's additional profit share has been recognised as an expense in the
FCC (Group Treasury and other) segment.
- The group will subscribe for shares in African Bank Holdings Limited for R16.4 million on 11 March 2016 and for an additional R638.6 million on 30 March
2016. This will represent a 6.5% holding in African Bank Holdings Limited.
BOARD CHANGES
Sizwe Errol Nxasana resigned as chief executive officer and executive director of FirstRand and FirstRand Bank on 30 September 2015.
Johan Petrus Burger was appointed as chief executive officer of FirstRand and FirstRand Bank in place of Sizwe Errol Nxasana on 1 October 2015.
Alan Patrick Pullinger was appointed deputy chief executive officer and executive director of FirstRand and FirstRand Bank on 1 October 2015.
In addition to the above:
Paballo Joel Makosholo was appointed as a non-executive director of FirstRand and FirstRand Bank on 1 October 2015.
Kgotso Buni Schoeman resigned as a non-executive director of FirstRand and FirstRand Bank on 30 September 2015.
Leon Crouse will resign as a non-executive director of FirstRand and FirstRand Bank with effect from 31 March 2016.
CASH DIVIDEND DECLARATIONS
ORDINARY SHARES
The directors declared a gross cash dividend totalling 108.0 cents per ordinary share out of income reserves for the six months ended 31 December 2015.
ORDINARY DIVIDENDS
Six months ended
31 December
Cents per share 2015 2014
Interim (declared 7 March 2016) 108.0 93.0
The salient dates for the interim dividend are as follows:
Last day to trade cum-dividend Wednesday 23 March 2016
Shares commence trading ex-dividend Thursday 24 March 2016
Record date Friday 1 April 2016
Payment date Monday 4 April 2016
Share certificates may not be dematerialised or rematerialised between Thursday 24 March 2016 and Friday 1 April 2016, both days inclusive.
For shareholders who are subject to DWT, tax will be calculated at 15% (or such lower rate if a double taxation agreement applies for foreign shareholders).
For South African shareholders who are subject to DWT, the net interim dividend after deducting 15% tax will be 91.80000 cents per share.
The issued share capital on the declaration date was 5 609 488 001 ordinary shares and 45 000 000 variable rate NCNR B preference shares.
FirstRand's income tax reference number is 9150/201/71/4.
B PREFERENCE SHARES
Dividends on the B preference shares are calculated at a rate of 75.56% of the prime lending rate of FNB, a division of FirstRand Bank Limited.
DIVIDENDS DECLARED
Preference
Cents per share dividends
Period:
25 February 2014 - 25 August 2014 341.1
26 August 2014 - 23 February 2015 348.5
24 February 2015 - 31 August 2015 363.9
1 September 2015 - 29 February 2016 366.5
LL Dippenaar JP Burger C Low
Chairman CEO Company secretary
7 March 2016
CONDENSED CONSOLIDATED INCOME STATEMENT - IFRS
Six months ended Year ended
31 December 30 June
R million 2015 2014 % change 2015
Net interest income before impairment of advances 20 020 17 489 14 35 621
Impairment of advances (2 870) (2 704) 6 (5 150)
Net interest income after impairment of advances 17 150 14 785 16 30 471
Non-interest revenue 16 866 18 791 (10) 37 421
Income from operations 34 016 33 576 1 67 892
Operating expenses (19 756) (19 339) 2 (38 692)
Net income from operations 14 260 14 237 - 29 200
Share of profit of associates after tax 349 405 (14) 1 085
Share of profit of joint ventures after tax 453 332 36 454
Income before tax 15 062 14 974 1 30 739
Indirect tax (427) (491) (13) (884)
Profit before tax 14 635 14 483 1 29 855
Income tax expense (3 357) (3 352) - (6 731)
Profit for the period 11 278 11 131 1 23 124
Attributable to
Ordinary equityholders 10 480 10 304 2 21 623
NCNR preference shareholders 164 153 7 310
Equityholders of the group 10 644 10 457 2 21 933
Non-controlling interests 634 674 (6) 1 191
Profit for the period 11 278 11 131 1 23 124
Earnings per share (cents)
- Basic 186.9 187.8 - 390.1
- Diluted 186.9 187.8 - 390.1
Headline earnings per share (cents)
- Basic 185.4 180.5 3 381.4
- Diluted 185.4 180.5 3 381.4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - IFRS
Six months ended Year ended
31 December 30 June
R million 2015 2014 % change 2015
Profit for the period 11 278 11 131 1 23 124
Items that may subsequently be reclassified to profit or loss
Cash flow hedges 528 (141) (>100) (271)
Gains/(losses) arising during the period 717 (368) (>100) (569)
Reclassification adjustments for amounts included in profit or loss 16 172 (91) 193
Deferred income tax (205) 55 (>100) 105
Available-for-sale financial assets (684) (113) >100 (377)
(Losses)/gains arising during the period (966) 170 (>100) (102)
Reclassification adjustments for amounts included in profit or loss 2 (227) (>100) (293)
Deferred income tax 280 (56) (>100) 18
Exchange differences on translating foreign operations 2 521 378 >100 406
Gains arising during the period 2 521 378 >100 406
Share of other comprehensive income of associates and joint ventures after
tax and non-controlling interests 63 (65) (>100) (262)
Items that may not subsequently be reclassified to profit or loss
Remeasurements on defined benefit
post-employment plans (64) (136) (53) (140)
Losses arising during the period (89) (140) (36) (141)
Deferred income tax 25 4 >100 1
Other comprehensive income for the period 2 364 (77) (>100) (644)
Total comprehensive income for the period 13 642 11 054 23 22 480
Attributable to
Ordinary equityholders 12 742 10 231 25 21 062
NCNR preference shareholders 164 153 7 310
Equityholders of the group 12 906 10 384 24 21 372
Non-controlling interests 736 670 10 1 108
Total comprehensive income for the period 13 642 11 054 23 22 480
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION - IFRS
As at 31 December As at 30 June
R million 2015 2014 2015
ASSETS
Cash and cash equivalents 61 120 53 507 65 567
Derivative financial instruments 69 001 39 325 34 500
Commodities 10 779 6 271 7 354
Accounts receivable 9 509 7 389 8 009
Current tax asset 1 321 1 042 115
Advances 794 428 721 529 751 366
Investment securities and other investments 164 972 123 879 165 171
Investments in associates 6 242 5 723 5 781
Investments in joint ventures 1 424 1 536 1 282
Property and equipment 17 032 15 724 16 288
Intangible assets 1 574 1 110 1 068
Reinsurance assets 587 436 388
Post-employment benefit asset 4 5 4
Investment properties 416 432 460
Deferred income tax asset 918 417 1 540
Non-current assets and disposal groups held for sale 181 223 373
Total assets 1 139 508 978 548 1 059 266
EQUITY AND LIABILITIES
Liabilities
Short trading positions 6 069 512 5 685
Derivative financial instruments 82 014 42 959 40 917
Creditors and accruals 14 564 14 630 17 001
Current tax liability 375 382 353
Deposits 899 619 801 698 865 521
Provisions 668 767 623
Employee liabilities 6 963 7 100 9 734
Other liabilities 7 492 7 325 6 876
Policyholder liabilities 1 236 533 542
Deferred income tax liability 956 893 913
Tier 2 liabilities 15 554 10 380 12 497
Liabilities directly associated with disposal groups held for sale 207 - -
Total liabilities 1 035 717 887 179 960 662
Equity
Ordinary shares 56 57 56
Share premium 7 980 6 407 7 997
Reserves 87 825 77 147 82 725
Capital and reserves attributable to ordinary equityholders 95 861 83 611 90 778
NCNR preference shares 4 519 4 519 4 519
Capital and reserves attributable to equityholders of the group 100 380 88 130 95 297
Non-controlling interests 3 411 3 239 3 307
Total equity 103 791 91 369 98 604
Total equity and liabilities 1 139 508 978 548 1 059 266
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - IFRS
As at 31 December As at 30 June
R million 2015 2014 2015
Cash generated from operating activities
Cash receipts from customers 46 635 42 732 85 324
Cash paid to customers, suppliers and employees (30 192) (25 576) (52 049)
Dividends received 3 327 1 636 4 323
Dividends paid (6 727) (5 660) (11 034)
Dividends paid to non-controlling interests (583) (398) (764)
Cash generated from operating activities 12 460 12 734 25 800
Increase in income-earning assets (30 517) (39 767) (110 584)
Increase in deposits and other 14 408 25 973 97 250
Taxation paid (4 152) (4 072) (8 065)
Net cash (utilised by)/generated from operating activities (7 801) (5 132) 4 401
Net cash outflow from investing activities (1 378) (1 371) (2 554)
Net cash inflow/(outflow) from financing activities 3 606 (857) 2 729
Net (decrease)/increase in cash and cash equivalents (5 573) (7 360) 4 576
Cash and cash equivalents at the beginning of the period 65 567 60 756 60 756
Cash and cash equivalents disposed of through the disposal of subsidiaries (1) - 67
Effect of exchange rate changes on cash and cash equivalents 1 127 111 168
Cash and cash equivalents at the end of the period 61 120 53 507 65 567
Mandatory reserve balances included above* 21 762 20 069 21 489
* Banks are required to deposit a minimum average balance calculated monthly with the central bank, which is not available for use in the group's day-to-day
operations. The deposit bears no or low interest. Money at short notice constitutes amounts withdrawable in 32 days or less.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - IFRS
for the six months ended 31 December
Ordinary share capital and ordinary equityholders' funds
Defined Reserves
Share benefit Share- Foreign attributable
capital post- Cash flow based Available- currency to ordinary NCNR Non-
Share Share and share employment hedge payment for-sale translation Other Retained equity- preference controlling Total
R million capital premium premium reserve reserve reserve reserve reserve reserves earnings holders shares interests equity
Balance as at 1 July 2014 55 5 531 5 586 (651) 461 2 783 436 2 352 270 69 277 74 928 4 519 3 184 88 217
Share movements relating to the unwind of the staff share trust* 1 873 874 - - - - - - - - - - 874
Disposal of subsidiaries - - - - - - - - - - - - (72) (72)
Movement in other reserves - - - - - (521) - - 12 (981) (1 490) - (3) (1 493)
Ordinary dividends - - - - - - - - - (5 507) (5 507) - (398) (5 905)
Preference dividends - - - - - - - - - - - (153) - (153)
Transfer (to)/from general risk reserves - - - - - - - - (1) 1 - - - -
Changes in ownership interest of subsidiaries - - - - - - - - - (23) (23) - (142) (165)
Consolidation of treasury shares 1 3 4 - - - - - - 1 1 - - 5
Total comprehensive income for the period - - - (136) (141) - (112) 369 (53) 10 304 10 231 153 670 11 054
Vesting of share-based payments - - - - - (2 207) - - - 1 214 (993) - - (993)
Balance as at 31 December 2014 57 6 407 6 464 (787) 320 55 324 2 721 228 74 286 77 147 4 519 3 239 91 369
Balance as at 1 July 2015 56 7 997 8 053 (791) 190 21 64 2 757 261 80 223 82 725 4 519 3 307 98 604
Issue of share capital and premium - - - - - - - - - - - - 30 30
Disposal of subsidiaries - - - - - - - - - - - - (81) (81)
Movement in other reserves - - - - - - - - (1) (4) (5) - 2 (3)
Ordinary dividends - - - - - - - - - (6 563) (6 563) - (583) (7 146)
Preference dividends - - - - - - - - - - - (164) - (164)
Transfer from/(to) general risk reserves - - - - - - - - 12 (12) - - - -
Changes in ownership interest of subsidiaries - - - - - - - - - (1 077) (1 077) - - (1 077)
Consolidation of treasury shares - (17) (17) - - - - - - - - - - (17)
Total comprehensive income for the period - - - (64) 528 - (667) 2 421 44 10 480 12 742 164 736 13 642
Vesting of share-based payments - - - - - - - - - 3 3 - - 3
Balance as at 31 December 2015 56 7 980 8 036 (855) 718 21 (603) 5 178 316 83 050 87 825 4 519 3 411 103 791
* Shares previously treated as treasury shares.
SEGMENT REPORT
for the six months ended 31 December 2015
FNB RMB#
Retail FCC
(including
Group FirstRand FirstRand
Residential Personal Retail Investment Corporate Treasury) group - Normalised group
R million mortgages Card loans other Retail Commercial FNB Africa** Total FNB banking banking Total RMB# WesBank and other normalised adjustments - IFRS
Net interest income before impairment
of advances 1 873 1 076 1 230 2 760 6 939 3 473 1 278 11 690 2 044 963 3 007 5 008 1 118 20 823 (803) 20 020
Impairment of advances (160) (220) (439) (347) (1 166) (194) (210) (1 570) (350) (32) (382) (1 358) 165 (3 145) 275 (2 870)
Net interest income after impairment of
advances 1 713 856 791 2 413 5 773 3 279 1 068 10 120 1 694 931 2 625 3 650 1 283 17 678 (528) 17 150
Non-interest revenue 265 793 436 5 151 6 645 3 222 1 644 11 511 3 270 1 079 4 349 1 908 (859) 16 909 (43) 16 866
Income from operations 1 978 1 649 1 227 7 564 12 418 6 501 2 712 21 631 4 964 2 010 6 974 5 558 424 34 587 (571) 34 016
Operating expenses (873) (977) (559) (4 368) (6 777) (3 638) (1 884) (12 299) (2 618) (1 198) (3 816) (2 969) (619) (19 703) (53) (19 756)
Net income from operations 1 105 672 668 3 196 5 641 2 863 828 9 332 2 346 812 3 158 2 589 (195) 14 884 (624) 14 260
Share of profit of associates and joint
ventures after tax - - - 13 13 - 1 14 862 - 862 153 (216) 813 (11) 802
Income before tax 1 105 672 668 3 209 5 654 2 863 829 9 346 3 208 812 4 020 2 742 (411) 15 697 (635) 15 062
Indirect tax (8) (23) (9) (191) (231) (17) (58) (306) (60) (4) (64) (127) 70 (427) - (427)
Profit for the period before tax 1 097 649 659 3 018 5 423 2 846 771 9 040 3 148 808 3 956 2 615 (341) 15 270 (635) 14 635
Income tax expense (307) (182) (185) (846) (1 520) (797) (278) (2 595) (882) (226) (1 108) (733) 879 (3 557) 200 (3 357)
Profit for the period 790 467 474 2 172 3 903 2 049 493 6 445 2 266 582 2 848 1 882 538 11 713 (435) 11 278
Attributable to
Ordinary equityholders 790 467 474 2 172 3 903 2 049 256 6 208 2 242 563 2 805 1 856 46 10 915 (435) 10 480
NCNR preference shareholders - - - - - - - - - - - - 164 164 - 164
Non-controlling interests - - - - - - 237 237 24 19 43 26 328 634 - 634
Profit for the period 790 467 474 2 172 3 903 2 049 493 6 445 2 266 582 2 848 1 882 538 11 713 (435) 11 278
Attributable earnings to ordinary
shareholders 790 467 474 2 172 3 903 2 049 256 6 208 2 242 563 2 805 1 856 46 10 915 (435) 10 480
Headline earnings adjustments - - - - - - - - - - - - - - (81) (81)
Headline earnings 790 467 474 2 172 3 903 2 049 256 6 208 2 242 563 2 805 1 856 46 10 915 (516) 10 399
TRS and IFRS 2 liability
remeasurement - - - - - - - - - - - - - - 569 569
IFRS 2 share-based payment expense - - - - - - - - - - - - - - - -
Treasury shares - - - - - - - - - - - - - - (1) (1)
IAS 19 adjustment - - - - - - - - - - - - - - (53) (53)
Private equity subsidiary realisations - - - - - - - - - - - - - - 1 1
Normalised earnings* 790 467 474 2 172 3 903 2 049 256 6 208 2 242 563 2 805 1 856 46 10 915 - 10 915
The segmental analysis is based on the management accounts for the respective segments.
* Normalised earnings for FNB, RMB and WesBank exclude the return of capital in the rest of Africa, cost of preference shares and other capital and, therefore, differ from franchise normalised earnings reported.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R286 million profit before tax.
FNB RMB#
Retail
FCC
(including
Group FirstRand FirstRand
Residential Personal Retail Investment Corporate Treasury) group - Normalised group
R million mortgages Card loans other Retail Commercial FNB Africa** Total FNB banking banking Total RMB# WesBank and other normalised adjustments - IFRS
Cost-to-income ratio (%) 40.8 52.3 33.6 55.1 49.8 54.3 64.5 53.0 42.4 58.7 46.4 42.0 >100 51.1 - 52.4
Diversity ratio (%) 12.4 42.4 26.2 65.2 49.0 48.1 56.3 49.6 66.9 52.8 63.4 29.2 (>100) 46.0 - 46.9
Credit loss ratio (%) 0.18 2.18 6.04 5.34 1.01 0.64 1.07 0.95 0.32 0.16 0.29 1.36 (0.04) 0.77 - 0.73
NPLs as a percentage of advances (%) 2.30 2.54 4.66 4.01 2.58 2.37 3.76 2.69 1.74 0.30 1.50 3.03 - 2.30 - 2.40
Consolidated income statement
includes
Depreciation (3) (2) (4) (663) (672) (14) (96) (782) (58) (2) (60) (250) (15) (1 107) (40) (1 147)
Amortisation - - - (2) (2) - (4) (6) (5) - (5) (32) (2) (45) 36 (9)
Net impairment charge - - - 7 7 - - 7 - (2) (2) - (8) (3) (6) (9)
Statement of financial position includes
Advances (after ISP - before
impairments) 184 641 20 854 15 206 13 690 234 391 62 168 41 894 338 453 222 472 46 088 268 560 207 969 29 709 844 691 (38 104) 806 587
- Normal advances 184 641 20 854 15 206 13 690 234 391 62 168 41 894 338 453 213 369 46 088 259 457 192 791 4 550 795 251 (3 842) 791 409
- Securitised advances - - - - - - - - - - - 15 178 - 15 178 - 15 178
- Credit related assets - - - - - - - - 9 103 - 9 103 - 25 159 34 262 (34 262) -
NPLs net of ISP 4 253 530 709 549 6 041 1 472 1 575 9 088 3 881 137 4 018 6 303 - 19 409 (50) 19 359
Investment in associated companies - - - 258 258 - 4 262 4 103 - 4 103 1 883 (6) 6 242 - 6 242
Investments in joint ventures - - - - - - - - 1 402 - 1 402 - (14) 1 388 36 1 424
Total deposits (including non-recourse
deposits) 158 1 606 1 168 699 170 464 169 366 35 389 375 219 107 691 130 879 238 570 55 285 775 899 619 - 899 619
Total assets 183 501 20 156 14 050 35 245 252 952 61 879 48 078 362 909 416 480 49 868 466 348 212 621 97 645 1 139 523 (15) 1 139 508
Total liabilities* 183 175 19 826 13 752 29 427 246 180 60 267 47 953 354 400 409 524 48 847 458 371 207 590 15 354 1 035 715 2 1 035 717
Capital expenditure 1 1 1 761 764 24 553 1 341 81 3 84 929 8 2 362 - 2 362
The segmental analysis is based on the management accounts for the respective segments.
* Total liabilities are net of interdivisional balances.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R286 million profit before tax.
SEGMENT REPORT
for the six months ended 31 December 2014
FNB RMB#
Retail
FCC
(including
Group FirstRand FirstRand
Residential Personal Investment Corporate Treasury) group - Normalised group
R million mortgages Card loans Retail other Retail Commercial FNB Africa** Total FNB banking banking Total RMB# WesBank and other normalised adjustments - IFRS
Net interest income before impairment
of advances 1 715 868 1 085 2 310 5 978 2 925 1 214 10 117 2 145 787 2 932 4 464 1 520 19 033 (1 544) 17 489
Impairment of advances (55) (16) (415) (493) (979) (154) (189) (1 322) (639) (67) (706) (1 208) 150 (3 086) 382 (2 704)
Net interest income after impairment of
advances 1 660 852 670 1 817 4 999 2 771 1 025 8 795 1 506 720 2 226 3 256 1 670 15 947 (1 162) 14 785
Non-interest revenue 230 765 358 5 133 6 486 3 067 1 417 10 970 2 848 1 076 3 924 1 745 (510) 16 129 2 662 18 791
Income from operations 1 890 1 617 1 028 6 950 11 485 5 838 2 442 19 765 4 354 1 796 6 150 5 001 1 160 32 076 1 500 33 576
Operating expenses (833) (895) (450) (4 196) (6 374) (3 333) (1 547) (11 254) (2 348) (1 092) (3 440) (2 742) (797) (18 233) (1 106) (19 339)
Net income from operations 1 057 722 578 2 754 5 111 2 505 895 8 511 2 006 704 2 710 2 259 363 13 843 394 14 237
Share of profit of associates and joint
ventures after tax - - - 18 18 - - 18 805 - 805 160 (241) 742 (5) 737
Income before tax 1 057 722 578 2 772 5 129 2 505 895 8 529 2 811 704 3 515 2 419 122 14 585 389 14 974
Indirect tax (18) (19) (9) (178) (224) (18) (42) (284) (47) 20 (27) (110) (70) (491) - (491)
Profit for the period before tax 1 039 703 569 2 594 4 905 2 487 853 8 245 2 764 724 3 488 2 309 52 14 094 389 14 483
Income tax expense (291) (197) (159) (726) (1 373) (695) (276) (2 344) (774) (203) (977) (618) 665 (3 274) (78) (3 352)
Profit for the period 748 506 410 1 868 3 532 1 792 577 5 901 1 990 521 2 511 1 691 717 10 820 311 11 131
Attributable to
Ordinary equityholders 748 506 410 1 868 3 532 1 792 350 5 674 1 972 477 2 449 1 619 251 9 993 311 10 304
NCNR preference shareholders - - - - - - - - - - - - 153 153 - 153
Non-controlling interests - - - - - - 227 227 18 44 62 72 313 674 - 674
Profit for the period 748 506 410 1 868 3 532 1 792 577 5 901 1 990 521 2 511 1 691 717 10 820 311 11 131
Attributable earnings to ordinary
shareholders 748 506 410 1 868 3 532 1 792 350 5 674 1 972 477 2 449 1 619 251 9 993 311 10 304
Headline earnings adjustments - - - - - - - - - - - - - - (403) (403)
Headline earnings 748 506 410 1 868 3 532 1 792 350 5 674 1 972 477 2 449 1 619 251 9 993 (92) 9 901
TRS and IFRS 2 liability
remeasurement - - - - - - - - - - - - - - (144) (144)
IFRS 2 share-based payment expense - - - - - - - - - - - - - - 75 75
Treasury shares - - - - - - - - - - - - - - 49 49
IAS 19 adjustment - - - - - - - - - - - - - - (54) (54)
Private equity subsidiary realisations - - - - - - - - - - - - - - 166 166
Normalised earnings* 748 506 410 1 868 3 532 1 792 350 5 674 1 972 477 2 449 1 619 251 9 993 - 9 993
The segmental analysis is based on the management accounts for the respective segments.
* Normalised earnings for FNB, RMB and WesBank exclude the return of capital in the rest of Africa, cost of preference shares and other capital and, therefore, differ from franchise normalised earnings reported.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R293 million profit before tax.
FNB RMB#
Retail
FCC
(including
Group FirstRand FirstRand
Residential Personal Investment Corporate Treasury) group Normalised group
R million mortgages Card loans Retail other Retail Commercial FNB Africa** Total FNB banking banking Total RMB# WesBank and other - normalised adjustments - IFRS
Cost-to-income ratio (%) 42.8 54.8 31.2 56.2 51.1 55.6 58.8 53.3 40.5 58.6 44.9 43.1 >100 50.8 - 52.2
Diversity ratio (%) 11.8 46.8 24.8 69.0 52.1 51.2 53.9 52.1 63.0 57.8 61.7 29.9 (>100) 47.0 - 52.8
Credit loss ratio (%) 0.06 0.19 6.55 9.57 0.92 0.60 1.13 0.89 0.59 0.39 0.56 1.35 (0.04) 0.84 - 0.76
NPLs as a percentage of advances (%) 2.88 1.87 5.39 4.71 3.04 2.42 2.55 2.88 1.55 0.89 1.45 2.95 - 2.38 - 2.45
Consolidated income statement
includes
Depreciation (3) (3) (1) (547) (554) (10) (77) (641) (52) (2) (54) (244) (16) (955) (50) (1 005)
Amortisation - - - (3) (3) - (4) (7) (6) - (6) (33) (2) (48) (2) (50)
Net impairment charge - - - (2) (2) - - (2) - - - (15) (8) (25) (9) (34)
Statement of financial position includes
Advances (after ISP - before
impairments) 175 097 17 356 12 831 11 143 216 427 52 825 34 480 303 732 223 569 37 569 261 138 184 591 5 718 755 179 (22 409) 732 770
- Normal advances 175 097 17 356 12 831 11 143 216 427 52 825 34 480 303 732 204 874 37 569 242 443 169 024 5 688 720 887 (3 684) 717 203
- Securitised advances - - - - - - - - - - - 15 567 - 15 567 - 15 567
- Credit related assets - - - - - - - - 18 695 - 18 695 - 30 18 725 (18 725) -
NPLs net of ISP 5 037 324 691 525 6 577 1 278 878 8 733 3 461 334 3 795 5 442 - 17 970 - 17 970
Investment in associated companies - - - 259 259 - 4 263 3 831 - 3 831 1 633 (4) 5 723 - 5 723
Investments in joint ventures - - - - - - - - 1 550 - 1 550 - (17) 1 533 3 1 536
Total deposits (including non-recourse
deposits) 152 1 490 1 148 031 149 674 148 638 31 162 329 474 101 324 102 632 203 956 50 268 218 801 698 - 801 698
Total assets 173 870 16 835 11 741 29 712 232 158 52 292 39 195 323 645 370 757 40 717 411 474 187 948 57 109 980 176 (1 628) 978 548
Total liabilities* 173 540 16 422 11 481 24 689 226 132 50 894 38 698 315 724 363 662 39 756 403 418 184 887 (16 852) 887 177 2 887 179
Capital expenditure - 2 - 1 557 1 559 20 435 2 014 178 1 179 670 1 2 864 - 2 864
The segmental analysis is based on the management accounts for the respective segments.
* Total liabilities are net of interdivisional balances.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R293 million profit before tax.
SEGMENT REPORT
for the year ended 30 June 2015
FNB RMB#
Retail
FCC
(including
Group FirstRand FirstRand
Residential Personal Investment Corporate Treasury) group - Normalised group
R million mortgages Card loans Retail other Retail Commercial FNB Africa* Total FNB banking banking Total RMB# WesBank and other normalised adjustments - IFRS
Net interest income before impairment
of advances 3 548 1 856 2 232 4 800 12 436 6 122 2 465 21 023 4 189 1 582 5 771 9 070 2 746 38 610 (2 989) 35 621
Impairment of advances (111) (191) (715) (742) (1 759) (311) (359) (2 429) (852) (175) (1 027) (2 597) 266 (5 787) 637 (5 150)
Net interest income after impairment of
advances 3 437 1 665 1 517 4 058 10 677 5 811 2 106 18 594 3 337 1 407 4 744 6 473 3 012 32 823 (2 352) 30 471
Non-interest revenue 486 1 436 757 10 073 12 752 6 001 2 824 21 577 7 037 2 051 9 088 3 603 (1 559) 32 709 4 712 37 421
Income from operations 3 923 3 101 2 274 14 131 23 429 11 812 4 930 40 171 10 374 3 458 13 832 10 076 1 453 65 532 2 360 67 892
Operating expenses (1 689) (1 772) (916) (8 918) (13 295) (6 734) (3 225) (23 254) (5 115) (2 117) (7 232) (5 427) (827) (36 740) (1 952) (38 692)
Net income from operations 2 234 1 329 1 358 5 213 10 134 5 078 1 705 16 917 5 259 1 341 6 600 4 649 626 28 792 408 29 200
Share of profit of associates and joint
ventures after tax - - - 18 18 - 1 19 1 607 - 1 607 342 (469) 1 499 40 1 539
Income before tax 2 234 1 329 1 358 5 231 10 152 5 078 1 706 16 936 6 866 1 341 8 207 4 991 157 30 291 448 30 739
Indirect tax (35) (44) (18) (303) (400) (35) (85) (520) (87) 16 (71) (239) (54) (884) - (884)
Profit for the period before tax 2 199 1 285 1 340 4 928 9 752 5 043 1 621 16 416 6 779 1 357 8 136 4 752 103 29 407 448 29 855
Income tax expense (616) (360) (375) (1 380) (2 731) (1 412) (540) (4 683) (1 898) (380) (2 278) (1 304) 1 639 (6 626) (105) (6 731)
Profit for the period 1 583 925 965 3 548 7 021 3 631 1 081 11 733 4 881 977 5 858 3 448 1 742 22 781 343 23 124
Attributable to
Ordinary equityholders 1 583 925 965 3 548 7 021 3 631 647 11 299 4 846 912 5 758 3 307 922 21 286 337 21 623
NCNR preference shareholders - - - - - - - - - - - - 310 310 - 310
Non-controlling interests - - - - - - 434 434 35 65 100 141 510 1 185 6 1 191
Profit for the period 1 583 925 965 3 548 7 021 3 631 1 081 11 733 4 881 977 5 858 3 448 1 742 22 781 343 23 124
Attributable earnings to ordinary
shareholders 1 583 925 965 3 548 7 021 3 631 647 11 299 4 846 912 5 758 3 307 922 21 286 337 21 623
Headline earnings adjustments - - - - - - - - - - - - - - (482) (482)
Headline earnings 1 583 925 965 3 548 7 021 3 631 647 11 299 4 846 912 5 758 3 307 922 21 286 (145) 21 141
TRS and IFRS 2 liability
remeasurement - - - - - - - - - - - - - - (34) (34)
IFRS 2 share-based payment expense - - - - - - - - - - - - - - 75 75
Treasury shares - - - - - - - - - - - - - - 25 25
IAS 19 adjustment - - - - - - - - - - - - - - (107) (107)
Private equity subsidiary realisations - - - - - - - - - - - - - - 186 186
Normalised earnings* 1 583 925 965 3 548 7 021 3 631 647 11 299 4 846 912 5 758 3 307 922 21 286 - 21 286
The segmental analysis is based on the management accounts for the respective segments.
* Normalised earnings for FNB, RMB and WesBank exclude the return of capital in the rest of Africa, cost of preference shares and other capital and, therefore, differ from franchise normalised earnings reported.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R403 million profit before tax.
FNB RMB#
Retail
FCC
(including
Group FirstRand FirstRand
Residential Personal Investment Corporate Treasury) group - Normalised group
R million mortgages Card loans Retail other Retail Commercial FNB Africa** Total FNB banking banking Total RMB# WesBank and other normalised adjustments - IFRS
Cost-to-income ratio (%) 41.9 53.8 30.6 59.9 52.7 55.5 61.0 54.6 39.9 58.3 43.9 41.7 >100 50.5 - 51.9
Diversity ratio (%) 12.0 43.6 25.3 67.8 50.7 49.5 53.4 50.7 67.4 56.5 65.0 30.3 (>100) 47.0 - 52.2
Credit loss ratio (%) 0.06 1.08 5.42 6.81 0.81 0.58 1.05 0.79 0.40 0.52 0.42 1.43 (0.04) 0.77 - 0.71
NPLs as a percentage of advances (%) 2.54 2.09 4.91 4.10 2.73 2.23 2.88 2.66 1.21 0.99 1.18 3.15 - 2.21 - 2.29
Consolidated income statement
includes
Depreciation (6) (5) (1) (1 176) (1 188) (23) (160) (1 371) (102) (5) (107) (481) (30) (1 989) (104) (2 093)
Amortisation - - - (2) (2) - (9) (11) (12) - (12) (70) (5) (98) (4) (102)
Net impairment charge - - - (4) (4) - - (4) - (2) (2) (27) (55) (88) (9) (97)
Statement of financial position includes
Advances (after ISP - before
impairments) 180 208 19 488 13 856 12 314 225 866 58 251 36 363 320 480 220 232 35 408 255 640 190 381 27 463 793 964 (31 368) 762 596
- Normal advances 180 208 19 488 13 856 12 314 225 866 58 251 36 363 320 480 209 076 35 408 244 484 174 321 10 606 749 891 (3 355) 746 536
- Securitised advances - - - - - - - - - - - 16 060 - 16 060 - 16 060
- Credit-related assets - - - - - - - - 11 156 - 11 156 - 16 857 28 013 (28 013) -
NPLs net of ISP 4 585 407 680 505 6 177 1 301 1 049 8 527 2 675 352 3 027 5 997 - 17 551 (50) 17 501
Investment in associated companies - - - 246 246 - 4 250 3 802 - 3 802 1 735 (6) 5 781 - 5 781
Investments in joint ventures - - - - - - - - 1 249 - 1 249 - (15) 1 234 48 1 282
Total deposits (including non-recourse
deposits) 155 1 467 1 156 676 158 299 152 912 31 350 342 561 113 128 117 130 230 258 53 292 649 865 521 - 865 521
Total assets 179 095 18 895 12 787 31 351 242 128 57 905 41 269 341 302 376 355 39 347 415 702 193 613 108 645 1 059 262 4 1 059 266
Total liabilities* 178 316 18 171 12 120 21 850 230 457 54 974 40 891 326 322 367 760 37 705 405 465 186 903 41 968 960 658 4 960 662
Capital expenditure - 3 7 2 637 2 647 32 1 467 4 146 334 4 338 1 021 11 5 516 - 5 516
The segmental analysis is based on the management accounts for the respective segments.
* Total liabilities are net of interdivisional balances.
** Includes FNB's activities in India.
# Includes contributions from the RMB Africa in-country operations of R403 million profit before tax.
FAIR VALUE HIERARCHY AND MEASUREMENTS
TRANSFERS BETWEEN FAIR VALUE HIERARCHY LEVELS
The following represents the significant transfers into levels 1, 2 and 3 and the reasons for these transfers. Transfers between levels of the fair value hierarchy are
deemed to occur at the beginning of the reporting period.
As at 31 December 2015
R million Transfers in Transfers out Reasons for transfers in
Level 1 - (2 821) There were no transfers into level 1.
Level 2 - - There were no transfers in or out of level 2.
Level 3 2 821 - Corporate bonds to the value of R2 821 million were transferred into level 3. Due to the market
for these bonds becoming less active, the fair value is determined using a valuation technique
that makes use of unobservable inputs for credit. The fair value measurement of these bonds are,
therefore, now categorised within level 3 of the fair value hierarchy.
Total transfers 2 821 (2 821)
As at 31 December 2014
R million Transfers in Transfers out Reasons for transfers in
Level 1 - - There were no transfers in or out of level 1.
Level 2 3 (353) The transfer into level 2 related to the lifting of a trading suspension on the investment
securities. These instruments have been allocated to level 2 of the hierarchy as the market for
these instruments is not yet considered to be active.
Level 3 353 (3) Investment securities to the value of R353 million were transferred into level 3 out of level 2 as
these investment securities were delisted from an exchange.
Total transfers 356 (356)
As at 30 June 2015
R million Transfers in Transfers out Reasons for transfers in
Level 1 - - There were no transfers in or out of level 1.
Level 2 64 (4 709) Deposits and loans of R61 million were transferred into level 2 from level 3 as the inputs
used to calculate their fair value became observable. An additional R3 million was transferred
into level 2 due to the lifting of a trading suspension on the investment securities. These
instruments have been allocated to level 2 of the hierarchy as the market for these
instruments is not yet considered to be active.
Level 3 4 709 (64) Corporate bonds to the value of R4 709 million were transferred into level 3. The market for
these bonds is not active and the fair value is determined using a valuation technique that
makes use of unobservable inputs for interest rate and foreign exchange and unobservable
inputs for credit. Level 3 of the fair value hierarchy is therefore deemed more appropriate.
Total transfers 4 773 (4 773)
CONTINGENCIES AND COMMITMENTS
As at 31 December As at 30 June
R million 2015 2014 % change 2015
Contingencies
Guarantees 34 304 32 314 6 34 995
Letters of credit 8 637 9 046 (5) 6 010
Total contingencies 42 941 41 360 4 41 005
Capital commitments
Contracted capital commitments 724 988 (27) 916
Capital expenditure authorised not yet contracted 3 374 1 684 100 4 424
Total capital commitments 4 098 2 672 53 5 340
Other commitments
Irrevocable commitments 114 413 82 749 38 87 464
Operating lease and other commitments 4 954 3 165 57 3 252
Total other commitments 119 367 85 914 39 90 716
Total contingencies and commitments 166 406 129 946 28 137 061
NUMBER OF ORDINARY SHARES IN ISSUE
Six months ended Six months ended Year ended
31 December 31 December 30 June
2015 2014 2015
IFRS Normalised IFRS Normalised IFRS Normalised
Shares in issue
Opening balance as at 1 July 5 609 488 001 5 609 488 001 5 637 941 689 5 637 941 689 5 637 941 689 5 637 941 689
Shares issued - - - 35 420 014 35 420 014 35 420 014
Shares bought back* - - (4 762 878) (63 873 702) (4 762 878) (63 873 702)
Shares cancelled** - - (59 110 824) - (59 110 824) -
Less: treasury shares (1 713 430) - (1 422 629) - (2 956 365) -
- BEE staff trusts - - - - - -
- Shares for client trading# (1 713 430) - (1 422 629) - (2 956 365) -
Number of shares in issue (after treasury shares) 5 607 774 571 5 609 488 001 5 572 645 358 5 609 488 001 5 606 531 636 5 609 488 001
Weighted average number of shares
Weighted average number of shares before treasury
shares 5 609 488 001 5 609 488 001 5 637 941 689 5 637 941 689 5 637 941 689 5 637 941 689
Shares issued - - - 192 500 14 944 335 17 661 486
Shares bought back - - (25 885) (347 139) (2 374 915) (31 849 353)
Shares cancelled - - (321 254) - (29 474 438) -
Less: treasury shares (1 638 742) - (152 005 917) - (77 479 695) -
- BEE staff trusts - - (150 578 240) - (75 907 935) -
- Shares for client trading (1 638 742) - (1 427 677) - (1 571 760) -
Weighted average number of shares in issue 5 607 849 259 5 609 488 001 5 485 588 633 5 637 787 050 5 543 556 976 5 623 753 822
Dilution impact:
- Staff schemes - - - - - -
- BEE staff trusts - - - - - -
Diluted weighted average number of shares in issue 5 607 849 259 5 609 488 001 5 485 588 633 5 637 787 050 5 543 556 976 5 623 753 822
Number of shares for normalised earnings per share
calculation
Weighted average and diluted weighted average
number of shares for calculation of normalised
earnings and diluted earnings per share*** n/a 5 609 488 001 n/a 5 637 787 050 n/a 5 623 753 822
* For IFRS reporting, only the shares bought back from the unconsolidated trusts resulted in a reduction in shares issued as the shares in the consolidated trusts
were historically treated as treasury shares. For normalised reporting, all shares in the consolidated and unconsolidated trusts were treated as externally issued.
** For IFRS reporting, shares held by the consolidated trusts were treated as treasury shares. For normalised reporting, shares held by the consolidated trusts
were treated as externally issued.
# For normalised reporting, shares held for client trading activities are treated as externally issued.
*** Number of shares calculated on a normalised basis.
COMPANY INFORMATION
DIRECTORS
LL Dippenaar (chairman), JP Burger (chief executive officer), AP Pullinger (deputy chief executive officer), HS Kellan (financial director), VW Bartlett, MS Bomela,
P Cooper (alternate), L Crouse, JJ Durand, GG Gelink, PM Goss, NN Gwagwa, PK Harris, WR Jardine, RM Loubser, PJ Makosholo, EG Matenge-Sebesho, AT Nzimande, D Premnarayen (India),
BJ van der Ross, JH van Greuning
COMPANY SECRETARY AND REGISTERED OFFICE
C Low
4 Merchant Place, Corner Fredman Drive and Rivonia Road
Sandton 2196
PO Box 650149, Benmore 2010
Tel: +27 11 282 1808
Fax: +27 11 282 8088
www.firstrand.co.za
JSE SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
Corporate Finance
1 Merchant Place, Corner Fredman Drive and Rivonia Road
Sandton 2196
Tel: +27 11 282 8000
Fax: +27 11 282 4184
JSE INDEPENDENT SPONSOR
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
2 Eglin Road
Sunninghill
Sandton 2196
NAMIBIAN SPONSOR
Simonis Storm Securities (Pty) Ltd
4 Koch Street
Klein Windhoek
Namibia
TRANSFER SECRETARIES - SOUTH AFRICA
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg 2001
PO Box 61051, Marshalltown 2107
Tel: +27 11 370 5000
Fax: +27 11 688 5248
TRANSFER SECRETARIES - NAMIBIA
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue, Windhoek
PO Box 2401, Windhoek, Namibia
Tel: +264 612 27647
Fax: +264 612 48531
8 March 2016
Date: 08/03/2016 08:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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