S.Africa's FirstRand sees higher profit, shares jump

JOHANNESBURG, Septa (Reuters) - FirstRand Ltd, South Africa's second-largest bank, said on Tuesday its full-year earnings likely rose by as much as 27 percent, sending its shares higher.

FirstRand said it expects diluted normalised earnings per share to increase by between 22 to 27 percent from 179.4 cents for the year to end-June. A poll of 17 analysts by Thomson Reuters showed an average forecast for 20 percent profit growth.

"It's an excellent performance, a very good result. It's definitely better than consensus," said Adrian Cloete, an analyst at Cadiz Asset Management.

The bank did not give a reason for the expected rise in profit. Earnings likely rose as a result of a strong performance by the retail arm First National Bank (FNB) and vehicle financing unit Wesbank, Cloete said.

FNB has waged a fierce campaign for its competitors' customers, which analysts expect will boost its non-interest revenue.

FirstRand is due to report full-year results on September 11. Its local rivals, all of whose financial year end in December, have so far reported leaner first-half results.

Industry lender Standard Bank posted a slim 9 percent rise in first-half earnings, while third-ranked Nedbank returned a 24 percent improvement.

South African banks have been pushing high-margin unsecured lending to counteract a drop in long-term loans like mortgages, and falling transactional account fees.

FirstRand has also been creeping north away from its traditional South African base to secure more business. It announced last month a $91 million purchase of a 75 percent stake in Merchant Bank Ghana.

It also has its eye on Nigeria, Africa's most populous nation that is also expected to be the continent's biggest economy in a few years.

FirstRand's shares were up over 2 percent at 27.95 rand, and nearly 35 percent stronger so far this year. The Top-40 index was 0.36 percent lower on the day.

Source: http://news.yahoo.com/africas-firstrand-sees-higher-profit-shares-jump-100716980--finance.html

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