JOHANNESBURG (Reuters) -South African lender FirstRand posted a 4% rise in annual profit on Thursday despite absorbing a 3 billion rand ($167 million) pre-tax accounting provision related to an investigation by Britain into the vehicle finance market.
Its normalised earnings rose to 38 billion rand in the year ended June 30 from 36.6 billion the previous year, the bank said.
Excluding the provision, normalised earnings grew by 10%, group CEO Mary Vilakazi said in a statement.
British lenders have been told by the Financial Conduct Authority to ensure they are adequately prepared to meet the potential costs of customer complaints arising from its review into the motor finance industry.
The regulator began looking into potential overcharging in the industry in January, amid rising tensions between thousands of consumers and lenders over commission arrangements.
In addition to the provision, 300 million rand of legal and professional fees were incurred in relation to the UK probe, the bank said.
($1 = 17.9160 rand)
(Reporting by Nqobile Dludla; editing by Jason Neely and Emelia Sithole-Matarise)
