FirstRand First-Half Profit Rises 13% After Bank Boosts Lending

JOHANNESBURG (Capital Markets in Africa) – FirstRand Ltd., Africa’s biggest bank by market value, said fiscal first-half profit rose 13 percent after lending increased and its insurance operations sold more policies.

Net income increased to 11.89 billion rand ($904 million) in the six months ended Dec. 31, from 10.48 billion rand a year earlier, the Johannesburg-based company said in a statement on Thursday. The interim dividend rose 10 percent to 1.19 rand a share, exceeding growth in so-called normalized earnings per share of 7 percent.

FirstRand benefited from South African interest rates at their highest level since 2010 which boosted the income it makes from lending. Insurance revenues grew 23 percent as the company’s retail lender First National Bank sold more funeral and credit products, while its autoloans unit, WesBank, was boosted by the acquisition of MotoVantage in November 2015.

“The group expects economic growth to pick up slightly,” FirstRand said. The lender will continue to target a return on equity of between 18 percent and 22 percent. ROE dropped to 22.9 percent in the first half from 23.4 percent.