FNB CEO on recession: Never waste a crisis

FNB CEO Jacques Celliers says the country falling into recession this week "highlights the urgency of the situation" and the crisis should not be wasted.

Celliers spoke to Fin24 on Thursday, following the release of parent company FirstRand’s [JSE:FSR] annual results to June 2018.

The results showed an 8% increase in normalised earnings to R26.4bn, up from R24.5bn in 2017 for the country’s second largest bank by asset value.

FNB, which represents FirstRand’s retail and commercial segment, contributed the majority of the group’s revenue share - a total of 57%.

The bank grew its pre-tax profits by 15% to R21.4bn, with strong growth in SA. Total customer numbers increased to 8 million.

Celliers was upbeat about the country’s prospects of exiting the recession, saying SA was getting "more right than wrong".

"How do you get the structural stuff right? You don’t fix a business with a presentation," he said.

He added that policy decisions to be made in the coming months, in the agricultural, energy, telecommunications and tourism industries, would improve sentiment.

"The market wants to operate," Celliers said, adding that he believed President Cyril Ramaphosa understood the need for policy certainty.

Difficult and slow recovery

Celliers said the bank's home loan divisions continued to show strength, despite the ongoing debate over expropriation without compensation.

"We are treating this environment as business as usual," he said.

FirstRand’s financial results noted that the macroeconomic environment in the second half of the group’s financial year "started more positively following the change in leadership of the ruling party, the appointment of President Ramaphosa as head of the government and a relatively investor-friendly cabinet reshuffle in February 2018."

But the financial services group warned that meaningful structural reform would be "difficult and slow".

The market reacted positively to FirstRand’s results in the morning and the company’s share price rose 3.95% to R67.38 on the JSE by 12:51.

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