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FirstRand CEO calls out SA government on continued Russian support

FirstRand CEO calls out SA government on continued Russian support
Neesa Moodley
By Neesa Moodley
2 Mar 2023
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Alan Pullinger, FirstRand’s CEO, says South Africa’s open support for Russia ‘could have extremely negative consequences for the country, which benefits far more from trade with and investment from the USA, UK and Europe than from Russia’.

FirstRand’s chief executive, Alan Pullinger, was harshly critical of the government when reviewing the outlook for the near to medium-term future. “The FATF [Financial Action Task Force] greylisting is unfortunate but not unexpected and we believe it is manageable.

“The main headwinds are increased compliance and transaction costs, and perhaps lower capital flows to the country. National Treasury, the Financial Sector Conduct Authority and the South African Reserve Bank put in a concerted effort to avoid this outcome, but some of the necessary deliverables were not within their control. As a sector, we will continue to work hard in partnership with them to get off the grey list as soon as possible.”

He adds that the geopolitical risk facing South Africa and the banking sector is much more worrying, referring to the government’s open support for Russia, which is increasingly being called out by major trading partners. 

“This could have extremely negative consequences for the country, which benefits far more from trade with and investment from the USA, UK and Europe than from Russia. In addition, the South African banking sector, and this includes our central bank, crucially relies on access to the US dollar, global clearing and settlement, which is a privilege and can be revoked at any time. For all of these reasons, FirstRand does not share government’s enthusiasm for Russia,” he commented in no uncertain terms.



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The financial services giant posted a 15% uptick in normalised earnings to R18-billion for the six months to December 2022. This strong earnings print, supported by capital optimisation, resulted in a normalised return on equity (ROE) of 21.8%, which is at the top end of the corporate’s target range of 18% to 22%. In addition, the group produced R6.2-billion of economic profit, which is now above pre-pandemic levels. The group’s credit performance was better than anticipated, with almost all portfolios posting decreasing non-performing loans.

Pullinger said FirstRand’s results reflect the strong operational performances from the group’s customer-facing businesses — FNB, WesBank, RMB and Aldermore — and “demonstrate the size and quality of FirstRand’s transactional and deposit franchises, continued momentum in lending, and a better credit outcome than expected”.

Retail lending in secured products, such as residential mortgages and vehicle and asset finance, continues to be focused on low- to medium-risk customers. In the commercial segment, lending focused on those sectors showing above-cycle growth and which are expected to perform well even in a high inflationary and interest rate environment.

Growth in corporate advances was strong, with new business also leaning towards lower-volatility sectors and better-rated counterparties. Total group non-interest revenue increased by 11%, supported by a 10% growth in fee and commission income, a 5% growth in trading income and a hefty 31% increase in insurance income.

Normalised profit before tax for the client-facing divisions was:

  • FNB showed a growth of 16% in normalised profit before tax (PBT), and ROE improved to 43%.

  • WesBank’s normalised PBT was up 4% and its ROE improved to 21%.

  • RMB delivered 25% growth in normalised PBT, and its ROE improved to 22.4%.

  • Aldermore and MotoNovo in the UK delivered 11% growth in normalised PBT and an ROE of 12% (in sterling). DM/BM

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