S.Africa’s FirstRand profit outlook boosted by economic rebound

Adds detail, quote, shares

JOHANNESBURG, June 7 (Reuters) – South African lender FirstRand FSRJ.J on Monday said its second-half earnings would be higher than previously guided citing a quicker-than-expected economic rebound.

The bank warned investors in March, when it said its first-half performance had beaten its expectations, not to expect a similar level of absolute earnings in the final six months.

However on Monday it said that guidance, which was based on expectations that lockdowns in December and January would result in higher bad debts, needed an update.

“The group has seen the (South African) economy rebound much faster than initially expected and this… has resulted in significantly lower impairments than predicted,” it said, while adding it was maintaining conservative provisions due to ongoing uncertainty.

It now expects its headline earnings per share – the main profit measure in South Africa – for the year to June 30 would likely be more than 35% higher than the 308.9 cents reported a year earlier, its trading statement continued.

It said however its cost growth would be higher than the 1% seen in the first half, with the increase for the year expected to be in the low single digits, and loan growth remained muted reflecting its cautious risk appetite.

It said it would issue a further trading statement at a later stage. Its shares were up 1% at 0718 GMT.

Source: nasdaq.com