FNB says ‘green shoots’ evident in customer data

First National Bank said (FNB) in a statement on Thursday (4 March), that its financial performance for the six months ended December 2020 reflects some improvement in the operating environment despite sustained pressure on consumers and businesses due to Covid-19 and the related lockdown measures.

FNB’s normalised profit before tax declined by 19% over the six months and the bank delivered a 30.1% return on equity (ROE). The group said that its customer base in South Africa increased by 3% to 8.5 million customers, while its eWallet transacting base is 2.8 million users.

Economic strain and the expiry of temporary credit relief measures impacted some customers, resulting in non-performing loans increasing by 26%. The six months saw strong momentum in FNB’s digital platform strategy, with a record 6 million digitally active customers and the transacting base on the FNB App exceeded 3.9 million for the first time.

FNB is part of FirstRand’s portfolio which also comprises RMB, WesBank and Aldermore. Given the profound difference in operating environments period-on-period, FirstRand reported normalised earnings down 21% with the normalised ROE reducing from 21.2% to 15.6%.

Basic and diluted headline earnings per share dropped 20% to 198.9 cents per share.

Pre-provision operating profit showed a marginal decrease of 1%, and the group declared a dividend of 110 cents per share, down from 146 cents before.

FNB’s pre-provision profit declined 4%, helped by the strength of its digital platforms. “Deposits continued to grow strongly and the premium and commercial segments benefited from active customer growth,” it said.

“The economy continues to open up and whilst the group expects origination levels to remain muted, transactional volumes are expected to trend back towards pre-pandemic levels by the fourth quarter of the financial year,” FirstRand said.

FNB chief executive officer, Jacques Celliers, said: “Our resilience in the previous six months puts us in a stronger position to accelerate exponential help for customers in our transact, credit, insure and invest activities in the months ahead.

“We are particularly pleased to see that our contextual digital platform continues to be warmly embraced by our customers, evident in increasing adoption of our market-leading digital interfaces.

Our customers have on average logged-in 29 times per month on the FNB App, increasing total average monthly logins by 41% and, on average, each customer engaged on the App for almost 46 minutes in December 2020.

“Similarly, we are encouraged by the ‘green shoots’ evident in our customer data which reflects that FNB Retail’s new and existing customer incomes are showing progressive signs of recovery.”

Read: South Africa’s biggest bank sends out earnings warning as unsecured loans bite

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FNB says ‘green shoots’ evident in customer data