{"id":852914,"date":"2026-03-05T10:30:00","date_gmt":"2026-03-05T08:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=852914"},"modified":"2026-03-05T10:34:13","modified_gmt":"2026-03-05T08:34:13","slug":"fnb-owner-sets-aside-r5-8-billion-for-legal-troubles-in-the-uk","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/852914\/fnb-owner-sets-aside-r5-8-billion-for-legal-troubles-in-the-uk\/","title":{"rendered":"FNB-owner sets aside R5.8 billion for legal troubles in the UK"},"content":{"rendered":"\n

Despite FirstRand setting aside close to R6 billion for claims related to a legal dispute in the UK, the company’s interim results were relatively strong. <\/p>\n\n\n\n

In its interim results for the six months ended 31 December 2025, CEO Mary Vilakazi said the bank has delivered strong topline growth, underpinned by momentum in deposits and advances. <\/p>\n\n\n\n

“Once again, the group’s diversified portfolio of leading client franchises – FNB, RMB and WesBank – has supported this performance, as all delivered growth and improved returns,” said Vilakazi.

“FirstRand’s normalised earnings increased by 11%, and economic profits grew by 26%. The capital, asset and liability optimisation strategies implemented over the past year have resulted in a sustainable, structural uplift in margin.”<\/p>\n\n\n\n

This supported an improved normalised ROE of 21.1%. This high ROE and resulting strong capital position enabled 18% interim dividend growth to 259.0 cents per ordinary share. <\/p>\n\n\n\n

Despite strong interim results, the group is still facing a legal dispute over its UK business, MotoNovo. <\/p>\n\n\n\n

The UK Financial Conduct Authority (FCA) is investigating the dealer who receives commission from MotoNovo for arranging car finance.<\/p>\n\n\n\n

While the UK Supreme Court held that motor dealers do not owe a fiduciary duty to highlight the commission arrangements, it still found FirstRand liable for unfair practices. <\/p>\n\n\n\n

FirstRand has thus been ordered to pay compensation in the case, and while the exact amount is yet to be determined, it will likely be in the billions of rands. <\/p>\n\n\n\n

During the interim period, FirstRand saw its group’s operating expenses increase 9%, which included R333 million of legal and other costs related to the UK motor commission matter<\/p>\n\n\n\n

The group has also set aside a provision of \u00a3240 million (about R5.8 billion), which is considered the best estimate, following the Supreme Court’s judgement. The provision was set aside before the interim period. <\/p>\n\n\n\n

After the FCA opened a consultation in October 2025 on a proposed industry-wide motor finance compensation scheme, FirstRand submitted a comprehensive response to the consultation paper. <\/p>\n\n\n\n

This response included input from King\u2019s Counsel and economic specialists. The group expects to hear the outcome of the consultation before the end of March 2026. <\/p>\n\n\n\n

However, the group said that even if the final FCA scheme requires a further provision beyond the current R5.8 billion, its strong capital position means that it will be able to declare a final dividend. <\/p>\n\n\n\n

FirstRand results<\/strong><\/td>H2 FY2025<\/strong><\/strong><\/td>H1 FY2025<\/strong><\/td>% Change<\/strong><\/td><\/tr><\/thead>
Normalised EPS – Basic (cents)<\/strong><\/td>415.8<\/td>373.1<\/td>11%<\/td><\/tr>
Normalised EPS – Diluted (cents)<\/strong><\/td>414.9<\/td>373.1<\/td>11%<\/td><\/tr>
Headline EPS – Basic (cents)<\/strong><\/td>414.9<\/td>374.4<\/td>11%<\/td><\/tr>
Headline EPS – Diluted (cents)<\/strong><\/td>414.0<\/td>374.4<\/td>11%<\/td><\/tr>
Earnings per share – IFRS Basic (cents)<\/strong><\/td>415.0<\/td>376.4<\/td>10%<\/td><\/tr>
Earnings per share – IFRS Diluted (cents)<\/strong><\/td>414.1<\/td>376.4<\/td>10%<\/td><\/tr>
Normalised earnings (R million)<\/strong><\/td>23 234<\/td>20 921<\/td>11%<\/td><\/tr>
Headline earnings (R million)<\/strong><\/td>23 121<\/td>20 964<\/td>10%<\/td><\/tr>
Normalised net asset value (R million)<\/strong><\/td>222 549<\/td>207 261<\/td>7%<\/td><\/tr>
Normalised NAV per share (cents)<\/strong><\/td>3 989.2<\/td>3 699.6<\/td>8%<\/td><\/tr>
Ordinary dividend per share (cents)<\/strong><\/td>259<\/td>219<\/td>18%<\/td><\/tr>
ROE (%)<\/strong><\/td>21.1<\/td>20.8<\/td>–<\/td><\/tr>
NAV per share – IFRS (cents)<\/strong><\/td>3 978.0<\/td>3 695.0<\/td>8%<\/td><\/tr>
Advances (net of credit impairment) (R m)<\/strong><\/td>1 803 557<\/td>1 710 087<\/td>5%<\/td><\/tr>
Deposits and debt funding (R million)<\/strong><\/td>2 255 856<\/td>2 159 408<\/td>4%<\/td><\/tr>
Credit loss ratio (%)<\/strong><\/td>0.86<\/td>0.84<\/td>–<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

FNB results<\/h2>\n\n\n\n

FNB also delivered a decent performance over the period, with normalised profit before tax (PBT) growth of 7%. <\/p>\n\n\n\n

FNB South Africa grew PBT 10%, supported by solid growth in its deposit, lending and transactional franchises.<\/p>\n\n\n\n

However, FNB’s broader Africa PBT reduced 12%, impacted predominantly by constrained client activity, increased funding costs and credit provisions in Botswana on the back of macroeconomic pressure and liquidity. <\/p>\n\n\n\n

Higher costs in Ghana also drove the implementation of a new core banking platform. Despite weaker performance in the African portfolio, FNB still posted an improved ROE of 41%. <\/p>\n\n\n\n

The improvement in ROE was driven by capital optimisation initiatives, improving retail credit performance, and NIR growth. <\/p>\n\n\n\n

“The size and quality of the transactional and deposit franchises continue to provide support to a sustainable, superior ROE,” said FirstRand. <\/p>\n\n\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

FirstRand has set aside billions to settle a legal dispute relating to its UK motor business. <\/p>\n","protected":false},"author":95,"featured_media":845329,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[4088,76,24927,2214],"class_list":["post-852914","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-firstrand","tag-fnb","tag-motonovo","tag-rmb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852914","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=852914"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852914\/revisions"}],"predecessor-version":[{"id":852938,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852914\/revisions\/852938"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/845329"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=852914"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=852914"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=852914"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}