FirstRand expects stronger performance, exceeding previous guidance

FirstRand Limited has updated shareholders, indicating a more positive operational and financial performance than previously expected for the year ending June 30, 2025. Balance sheet growth remains healthy, with advances and deposits increasing in line with expectations. Corporate origination showed good momentum, while commercial advances continued to grow across the portfolio, supported by SME lending. Despite rate cutting impacts, net interest income growth is expected to be slightly better than previously guided, supported by a reduced 'opportunity cost' emanating from the group's ALM strategy. Overall growth in NIR is in line with guidance, with fee and commission income growth similar to the first half. The group now expects to deliver full-year earnings growth of low double digit to mid-teens, which is also above its long-term target range, and the ROE remains within the stated target range of 18% to 22%. The company is awaiting a judgement from the UK Supreme Court regarding the UK motor commission matter, anticipated by the end of July 2025. The group expects to update its provision as part of its year-end results in September 2025.