{"id":874746,"date":"2026-09-10T11:02:04","date_gmt":"2026-09-10T09:02:04","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=874746"},"modified":"2026-09-10T11:06:02","modified_gmt":"2026-09-10T09:06:02","slug":"one-of-south-africas-most-valuable-banks-planning-a-major-exit","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/874746\/one-of-south-africas-most-valuable-banks-planning-a-major-exit\/","title":{"rendered":"One of South Africa’s most valuable banks planning major exit"},"content":{"rendered":"\n

FirstRand is preparing to exit one of its major UK businesses as the South African banking group shifts its focus back to South Africa and the rest of Africa.<\/p>\n\n\n\n

This was communicated in the bank\u2019s audited annual results for the year ended 30 June 2026.<\/p>\n\n\n\n

The group has classified the entire Aldermore Group, which includes Aldermore Bank and MotoNovo Finance, as a discontinued operation and a disposal group held for sale under IFRS 5 accounting rules.<\/p>\n\n\n\n

FirstRand has started a sale process that it expects to complete within 12 months. A confidential information memorandum and virtual data room have been made available to potential bidders.<\/p>\n\n\n\n

Non-binding offers are expected by the end of September 2026, and will be followed by due diligence, with final binding offers expected by the end of December.<\/p>\n\n\n\n

“The UK operating environment for a consumer finance business is increasingly uncertain, with the current regulatory landscape creating untenable look-back risk,” the group said.<\/p>\n\n\n\n

“This led the group to conclude that further capital deployment would not meet its risk appetite or hurdle rates.”<\/p>\n\n\n\n

A major factor behind the exit is the regulatory uncertainty surrounding historical motor finance commission arrangements.<\/p>\n\n\n\n

FirstRand recorded an additional pre-tax charge of \u00a3518.4 million (about R11.3 billion) for potential customer redress arising from the Financial Conduct Authority’s review.<\/p>\n\n\n\n

It also recognised \u00a329.4 million (R692 million) in associated costs, taking the total pre-tax impact of the UK motor commission issue to \u00a3547.8 million, or roughly R12 billion. <\/p>\n\n\n\n

After tax, the impact was R8.715 billion.<\/p>\n\n\n\n

The balance sheet provision for potential customer redress and associated costs reached R16.4 billion at 30 June 2026, compared with R5.8 billion a year earlier.<\/p>\n\n\n\n

FirstRand said the gross undiscounted provision, including the expected extension of the scheme start date, was \u00a3807 million, or about R17.5 billion.<\/p>\n\n\n\n

The proposed disposal also resulted in a R3.741 billion impairment of goodwill attached to the UK operation.<\/p>\n\n\n\n

Strong performance back home <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

FirstRand said the classification of the business as held for sale required the goodwill to be reassessed and impaired.<\/p>\n\n\n\n

Transaction and separation costs amounted to \u00a34.8 million, or R109 million, while restructuring charges linked to cost-efficiency and location strategy programmes totalled \u00a318.1 million, or R410 million.<\/p>\n\n\n\n

Overall, discontinued operations resulted in a loss attributable to ordinary equityholders of R2.655 billion.<\/p>\n\n\n\n

Despite the UK costs, FirstRand’s continuing operations performed strongly. Normalised earnings from continuing operations rose 13% to R44.46 billion, with a return on equity of 24.9%.<\/p>\n\n\n\n

The group’s total normalised earnings, including the discontinued operation, declined 5% to R39.69 billion, while group ROE remained within its target range at 18.3%.<\/p>\n\n\n\n

FirstRand said the exit would allow it to concentrate capital and management resources on markets where it sees stronger returns.<\/p>\n\n\n\n

“FirstRand has taken the decision to exit these businesses in the next 12 months to focus on South Africa and broader Africa,” it said.<\/p>\n\n\n\n

“The group believes this pivot in strategy and resource allocation should, over time, unlock higher levels of earnings growth and enhanced ROE.”<\/p>\n\n\n\n

Its main African businesses continued to provide the earnings strength behind the group. FNB’s normalised earnings increased 12% to R26.44 billion, while RMB’s rose 15% to R12.29 billion.<\/p>\n\n\n\n

WesBank’s earnings declined 4% to R2.29 billion, despite 14% growth in core advances, as higher credit impairments weighed on performance.<\/p>\n\n\n\n

Credit quality across continuing operations nevertheless improved, with the credit loss ratio falling to 1.05% from 1.08%.<\/p>\n\n\n\n

The board also declared a total ordinary dividend of 539 cents per share, up 16%, giving shareholders the group’s highest-ever total dividend payout.<\/p>\n\n\n\n

FirstRand said South Africa and broader Africa offered improving macroeconomic conditions and further growth opportunities, with FNB, RMB and WesBank positioned to benefit from that environment.<\/p>\n\n\n\n

The table below summarises FirstRand’s key financial results for the year ended 30 June 2026:<\/p>\n\n\n\n

<\/th>2026<\/th>2025<\/th>% Change<\/th><\/tr><\/thead>
Group Attributable Earnings (IFRS)<\/strong><\/td>R35,749 million<\/td>R41,876 million<\/td>(15%)<\/td><\/tr>
Group Total Normalised Earnings<\/strong><\/td>R39,694 million<\/td>R41,824 million<\/td>(5%)<\/td><\/tr>
Discontinued Operations Net Loss (IFRS)<\/strong><\/td>(R2,655 million)<\/td>R3,444 million<\/td>(>100%)<\/td><\/tr>
Normalised Continuing Earnings (Excl. UK)<\/strong><\/td>R44,461 million<\/td>R39,415 million<\/td>+13%<\/strong><\/td><\/tr>
Return on Equity (ROE) \u2013 Total Group<\/strong><\/td>18.3%<\/td>20.2%<\/td>(190 bps)<\/td><\/tr>
Return on Equity (ROE) \u2013 Continuing Operations<\/strong><\/td>24.9%<\/td>24.3%<\/td>+60 bps<\/strong><\/td><\/tr>
Net Interest Income (Continuing)<\/strong><\/td>R83,401 million<\/td>R77,002 million<\/td>+8%<\/strong><\/td><\/tr>
Non-Interest Revenue (Continuing)<\/strong><\/td>R65,604 million<\/td>R58,438 million<\/td>+12%<\/strong><\/td><\/tr>
Operating Expenses (Continuing)<\/strong><\/td>(R71,552 million)<\/td>(R65,751 million)<\/td>+9%<\/td><\/tr>
Credit Loss Ratio (Continuing Core Lending)<\/strong><\/td>1.05%<\/td>1.08%<\/td>(3 bps)<\/td><\/tr>
Stage 3 NPLs (% of Core Lending Advances)<\/strong><\/td>4.62%<\/td>4.70%<\/td>(8 bps)<\/td><\/tr>
Total Ordinary Dividend per Share<\/strong><\/td>539.0 cents<\/td>466.0 cents<\/td>+16%<\/strong><\/td><\/tr>
Normalised Net Asset Value per Share<\/strong><\/td>3,347.9 cents<\/td>3,044.8 cents<\/td>+10%<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

FirstRand is preparing to sell one of its major UK businesses and exit the country.<\/p>\n","protected":false},"author":92,"featured_media":815757,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2097974119207731268","_sma_facebook_post_id":"191437357620492_2201261170694282","_sma_instagram_post_id":"18084058151700994","_sma_x_attempts":1,"footnotes":""},"categories":[961],"tags":[4088,853],"class_list":["post-874746","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-firstrand","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874746","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\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=874746"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874746\/revisions"}],"predecessor-version":[{"id":874766,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/874746\/revisions\/874766"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/815757"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=874746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=874746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=874746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}