South African lender FirstRand Ltd on Thursday reported a 22% rise in full-year profit, near the middle of its estimated range, as the bank continued to benefit from a rebound in economic activity.
The continent’s biggest bank by market capitalisation posted a headline earnings per share (HEPS) – the main profit measure in South Africa – of 585.3 cents, up from 480.5 cents a year ago.
South African lenders have rebounded from COVID-19 lows sooner than expected but are seen treading a fine line between high local unemployment worsened by rising inflation and higher interest rates that are a positive for banks but increase the risks of loans going sour.
However, the country’s top banks so far have said they would see a net benefit of higher rates, boosting their core business.
FirstRand posted a net interest margin, which shows how much profit a bank is making from its core interest-earning assets, of 4.4%, a growth of 5 basis points from the prior year.
(Reporting by Promit Mukherjee; editing by David Evans)
