FirstRand H1 profit up 6%, outlook cautious

Basic diluted headline EPS came in at 224.2 cents in the six months ended December, compared with 211.5 cents a year earlier.

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JOHANNESBURG – South Africa’s No.1 lender by value, FirstRand, reported a 6% increase in half-year profit on Tuesday, a substantial slowdown from a year ago as a weak economy hit investment and consumption spending.

Basic diluted headline EPS came in at 224.2 cents in the six months ended December, compared with 211.5 cents a year earlier. The increase was less than half the 14% rise posted in the same period of the 2017 fiscal year.

Headline EPS is the primary measure of profit in South African that strips out certain one-off items.

Net interest income, a key measure of lending profitability, increased 7% to R23.7 billion, FirstRand said in a results filing.

FirstRand, along with rivals, has struggled to grow lending at a faster rate, as a stagnant economy and high personal debt levels have hit both investment and investment spending.

However, the election of Cyril Ramaphosa as South African president last month on promises of revitalizing the economy has lifted confidence among business leaders.

“FirstRand considers itself strategically well positioned to benefit from renewed growth,” Chief Executive Johan Burger said in a statement.

“However, given the structural nature of many of South Africa’s challenges, the group believes that the domestic fundamentals will not change quickly, therefore, it expects a similar macro picture for the remainder of its financial year to June 2018.”