The senior executives at FirstRand have seen their pay significantly increase. <\/p>\n\n\n\n
In its financial results for the entire year ended 30 June 2024, FNB’s normalised profit before tax increased by 1% to R31.5 billion, while its return on equity also jumped by 36.9%.<\/p>\n\n\n\n
However, due to the worse-than-expected interest rate cycle, where the repo rate hit a 15-year high of 8.25%, FNB’s retail segment is trending above its Through-The-Cycle (TTC) range.<\/p>\n\n\n\n
However, all of its retail lending lines remain profitable due to consistent origination for low-to-medium-risk customer cohorts.<\/p>\n\n\n\n
That said FNB\u2019s credit impairment charge increased by 50% to R10,148 million (2023: R6,744 million).<\/p>\n\n\n\n
The credit loss ratio also increased to 185 bps (2023: 132 bps).<\/p>\n\n\n\n
Some of the issues that caused this included an increase in both arrears and a significant increase in credit risk, a notable jump in debt counselling-related restructures and softer house price index growth, which impacted coverage ratios in the residential mortgage portfolio.<\/p>\n\n\n\n
The overall FirstRand group, however, had a far stronger credit performance than expected, with its credit loss ratio near the bottom of its TTC range of 80 to 100 bps at 81 bps.<\/p>\n\n\n\n
“This performance reflects the benefit of the group\u2019s approach to origination, particularly post the pandemic when new business was weighted towards the low- and medium-risk categories and was achieved despite the current pressures from high inflation and interest rates,” said FirstRand.<\/p>\n\n\n\n
The group noted that it raised a R3.0 billion accounting provision for a UK motor commission review, which impacted its results. <\/p>\n\n\n\n
Looking at its financials, the group’s headline earnings per share also increased by 4% to 679 cents per share.<\/p>\n\n\n\n
The group also increased its total dividend by 8% to 415 cents per share, citing a high ROE and ongoing capital generation.<\/p>\n\n\n\n Big payday<\/strong><\/p>\n\n\n\n Several of FirstRand’s top executives still earned handsome pay packages for the 2024 financial year. <\/p>\n\n\n\n Alan Pullinger, who left his role as FirstRand CEO during the year, saw his single-figure remuneration also double from R31.5 million in FY23 to R60.7 million in FY24.<\/p>\n\n\n\n Steven Cooper, the CEO of UK-based Aldermore, saw his pay package rise slightly to 2.29 million pounds (R53.9 million).<\/p>\n\n\n\n Former FNB CEO and FirstRand’s new executive in charge of its Fintech strategy, Jacques Celliers, saw his remuneration rise from R31 million to R48.6 million.<\/p>\n\n\n\n Newly appointed FNB CEO and former FirstRand CFO Harry Kellan also saw his pay rise from R25.9 million to R42.3 million. His pay was closely followed RMB CEO Emrie Brown’s R42 million.<\/p>\n\n\n\n Despite now running the ship, FirstRand CEO Mary Vilakazi’s single-figure remuneration package of R40.6 was only the sixth-highest across the group.<\/p>\n\n\n\n That said, as with all other leadership changes, Vilakazi’s promotion from COO to CEO only took place on 1 April 2024.<\/p>\n\n\n\n Overall, FirstRand’s seven executives earned a combined R315.3 million over the 2024 financial year. <\/p>\n\n\n\nFirstRand Financials<\/strong><\/td> FY23<\/strong><\/td> FY24<\/strong><\/td> % Change<\/strong><\/td><\/tr> Normalised earnings (Rm)<\/td> 36 634<\/td> 37 988<\/td> +4%<\/td><\/tr> Headline earnings (Rm)<\/td> 36 700<\/td> 38 054<\/td> +4%<\/td><\/tr> Basic and diluted headline earnings per share (cents)<\/td> 654.7<\/td> 679.0<\/td> +4%<\/td><\/tr> Basic and diluted earnings per share (cents)<\/td> 648.1<\/td> 681.4<\/td> +5%<\/td><\/tr> Credit loss ratio (%)<\/td> 0.78<\/td> 0.81<\/td> –<\/td><\/tr> Total Dividend<\/td> 384.0<\/td> 415.0<\/td> 8%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Executive<\/strong> <\/td> Position<\/strong><\/td> 2023<\/strong> (Rm)<\/strong><\/td> 2024<\/strong> (Rm)<\/strong><\/td><\/tr> Alan Pullinger<\/td> Former FirstRand CEO<\/td> 31 546<\/td> 60 710<\/td><\/tr> Steven Cooper*<\/td> Aldermore CEO<\/td> 52 818<\/td> 53 970<\/td><\/tr> Jacques Celliers<\/td> FirstRand Head of Fintech and former FNB CEO<\/td> 31 922<\/td> 48 679<\/td><\/tr> Harry Kellan<\/td> FNB CEO and Former FirstRand CFO<\/td> 25 934<\/td> 42 283<\/td><\/tr> Emrie Brown<\/td> RMB CEO<\/td> 38 802<\/td> 42 057<\/td><\/tr> Mary Vilakazi<\/td> Firstrand CEO and former COO<\/td> 25 811<\/td> 40 682<\/td><\/tr> Markos Davias<\/td> FirstRand CFO and former FNB CFO<\/td> –<\/td> 26 950<\/td><\/tr> James Formby<\/td> Former RMB CEO<\/td> 4 743<\/td> –<\/td><\/tr> Total<\/strong><\/td> –<\/td> 211 576<\/td> 315 330<\/strong><\/td><\/tr><\/tbody><\/table><\/div>
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