The company’s results for the year ended 30 June 2014 also saw a surge in its dividend by 33 per cent to 227.5 cents from 104.5 cents in 2013.
RMB said these results were achieved on the back of the strong operational performances of all three of the main FirstRand brands. FNB, RMB and WesBank which continued to outperform the market.
“The operating environment remained difficult throughout the financial year. This was largely as a consequence of uncertainty in the global macroeconomic arena combined with subdued domestic demand growth and protracted industrial action in the platinum sector,” reported [DATA RMH:RMB Holdings Limited].
RMB also reported an increase in its normalised earnings to 6.2 billion rand from 5.1 billion rand in 2013.
RMH’s primary interest is its 33.9 per cent investment in separately listed FirstRand Limited, generally regarded as Southern Africa’s pre-eminent financial services group.
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The company says South Africa’s large current account deficit was negatively impacted with the slow-down in capital flows.
“This led to the further weakening of the rand, which translated into higher domestic inflation and triggered the start of a higher interest rate cycle.”
Business and consumer confidence were negatively impacted by subdued demand growth, slowing of government and consumption spend, sluggish employment growth, rising inflation, a 50bps interest rate hike and weaker rand exchange rate.
On future prospects, the company says the South African consumer will be placed under further pressure due to the current interest rate hiking cycle which is likely to affect the group performance.
RMH believes that FirstRand’s strategy to grow its customer basket will place FirstRand in a good position to weather the difficult credit cycle that is expected to continue to emerge over the next 12 to 18 months.