FirstRand | Building a business for the long-term
FirstRand's FY '19 results showed an encouraging operational performance, as FNB's earnings increased 11% y/y. FSR's countercyclical investment in new product capabilities (historic investment supported the FY ‘19 results) continues to stand out compared to peers, as FNB SA's operating expenses increased 9% y/y compared to c.4% average cost growth for SA peers (excluding restructuring costs). In our view, FSR's share price offers attractive upside and higher quality earnings growth compared to peers. Please find our analysis and updated forecasts in this report.FirstRand is a holding company, engaged in providing banking, insurance and investment products and services to retail, commercial, corporate and public sector customers. Co.'s segment comprised of: First National Bank (FNB), which is engaged in providing transactional and deposit-taking, card acquiring, credit facilities and FNB distribution channels; Rand Merchant Bank, which is engaged in providing advisory, financing, trading, corporate banking and principal investing solutions; and WesBank, which is engaged in providing vehicle and asset finance in the retail, commercial and corporate segments operating through alliances and JVs with motor manufacturers, suppliers and dealer groups.
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