FirstRand Bank’s underlying operations delivered strong growth in the year to June 2026, but headline earnings were dragged down by a multibillion-rand provision linked to the UK motor finance commission scandal.
At the same time, the banking giant invested heavily in technology, expanded through a strategic fintech acquisition and maintained generous executive remuneration despite the earnings hit.
The bank reported IFRS attributable earnings of R26.1 billion, down 5% from the previous year, after recognising an additional UK motor commission provision and related costs. However, when excluding the UK provision, normalised earnings increased 13% to R32.2 billion, while return on equity improved to 24%, underscoring the strength of its South African and broader African operations.
Profit before tax rose 12% to R43.8-billion, supported by strong growth in both net interest income and non-interest revenue. Net interest income increased 8% to R71.1-billion, while non-interest revenue climbed 13% to R49.6-billion.
Fintech acquisition targets underbanked consumers
One of the notable developments during the year was the group’s acquisition of a 26% stake in fintech platform Optasia, a move aimed at expanding FirstRand’s reach among underbanked and unbanked consumers across Africa. The bank said the investment aligns with its strategy of entering partnerships that deliver new capabilities, customers and scale.
READ: Johann Rupert’s Remgro completes disposal of remaining FirstRand shares for R3.6bn
FirstRand described Optasia as one of the world’s largest fintech platforms and said the investment would provide access to proven technology that helps assess and serve customers who traditionally struggle to access conventional credit products. The deal forms part of the group’s broader Africa growth strategy, which has largely relied on organic expansion complemented by medium-sized bolt-on acquisitions.
The bank is also increasing its international footprint through its operations in eight African jurisdictions, while leveraging RMB’s hard-currency platform and cross-border lending capabilities to support trade and investment flows across the continent.
Technology and infrastructure spending accelerates
FirstRand significantly increased capital expenditure during the year as it continued to modernise its technology infrastructure and digital capabilities.
Capital expenditure rose to R6.56 billion, up from R5.74-billion in the prior year. The largest share of spending came from FNB, which invested R4.28-billion, followed by WesBank at R1.97-billion and RMB at R277-million.
The bank said operating expenses grew 10% largely because of investments in technology, platform modernisation and digital transformation initiatives. RMB specifically highlighted spending on global markets platforms, digital capability upgrades, client-facing technology and HSBC integration costs following the migration of acquired HSBC clients.
READ: FirstRand headline earnings up to R18bn
Additional investment was channelled into payment modernisation projects and artificial intelligence capabilities through the group centre. Computer-related expenses rose 9% to R4.94-billion, while professional fees increased 12% to R3.39 billion as strategic projects gathered pace.
Executive pay remains robust
Despite the decline in reported earnings, executive remuneration remained strong, reflecting operational performance and long-term incentive structures.
Chief executive Mary Vilakazi received a guaranteed package of R11.9-million and short-term incentives and restricted share awards worth R24-million, taking her total guaranteed and variable remuneration to R35.9-million. Including long-term incentive awards valued at R30-million, her total reward package reached R65.9 million compared to R78.2-million she earned last year.
Chief financial officer Markos Davias earned a guaranteed package of R9.3 million and variable pay of R19-million, bringing his total guaranteed and variable remuneration to R28.3-million. Including long-term incentives worth R21.9-million, his total reward package amounted to R50.2-million.
RMB chief executive Emrie Brown received total remuneration, including long-term incentives, of R51.8-million, while former FNB chief executive Harry Kellan received R32.8-million excluding long-term incentives.
The bank’s total share-based payment expense rose sharply to R2.58-billion from R2.16-billion, reflecting increased incentive awards and higher share-price-linked remuneration costs.
UK provision remains major setback
While operational results were strong, the largest drag on earnings remained the UK motor finance commission matter.
Including associated legal and operational costs, the total post-tax impact on earnings amounted to R6.05 billion.
The provision relates to historical commission arrangements in MotoNovo’s vehicle finance business in the United Kingdom and follows the publication of the UK Financial Conduct Authority’s final redress framework during March 2026.
FirstRand expects high single-digit to low double-digit earnings growth in the 2027 financial year. Management anticipates stronger loan growth, continued momentum in deposits and improved operational leverage, while ongoing investments in technology, digital platforms and strategic partnerships such as Optasia are expected to support future growth.
- FirstRand Bank reported IFRS attributable earnings of R26.1 billion for the year to June 2026, down 5% due to a multibillion-rand provision related to the UK motor finance commission scandal.
- Normalised earnings, excluding the UK provision, increased by 13% to R32.2 billion, with return on equity improving to 24%.
- The bank increased capital expenditure to R6.56 billion, with significant investments in technology and digital transformation, primarily by FNB and WesBank.
- FirstRand acquired a 26% stake in fintech platform Optasia to expand services to underbanked consumers across Africa as part of its growth strategy.
- The UK motor finance commission scandal led to an R11.4 billion provision, with the total post-tax impact on earnings amounting to R6.05 billion, prompting FirstRand to exit the UK consumer finance market.
FirstRand
At the same time, the banking giant invested heavily in technology, expanded through a strategic fintech acquisition and maintained generous executive remuneration despite the earnings hit.
Profit before tax rose 12% to R43.8-billion, supported by strong growth in both net interest income and non-interest revenue. Net interest income increased 8% to R71.1-billion, while non-interest revenue climbed 13% to R49.6-billion.
One of the notable developments during the year was the group’s acquisition of a 26% stake in fintech platform Optasia, a move aimed at expanding FirstRand’s reach among underbanked and unbanked consumers across Africa.
READ: Johann Rupert's Remgro completes disposal of remaining FirstRand shares for R3.6bn
FirstRand described Optasia as one of the world’s largest fintech platforms and said the investment would provide access to proven technology that helps assess and serve customers who traditionally struggle to access conventional credit products.
FirstRand significantly increased capital expenditure during the year as it continued to modernise its technology infrastructure and digital capabilities.
Capital expenditure rose to R6.56 billion, up from R5.74-billion in the prior year.
READ: FirstRand headline earnings up to R18bn
Additional investment was channelled into payment modernisation projects and artificial intelligence capabilities through the group centre. Computer-related expenses rose 9% to R4.94-billion, while professional fees increased 12% to R3.39 billion as strategic projects gathered pace.
Despite the decline in reported earnings, executive remuneration remained strong, reflecting operational performance and long-term incentive structures.
Chief executive Mary Vilakazi received a guaranteed package of R11.9-million and short-term incentives and restricted share awards worth R24-million, taking her total guaranteed and variable remuneration to R35.9-million.
Chief financial officer Markos Davias earned a guaranteed package of R9.3 million and variable pay of R19-million, bringing his total guaranteed and variable remuneration to R28.3-million.
RMB chief executive Emrie Brown received total remuneration, including long-term incentives, of R51.8-million, while former FNB chief executive Harry Kellan received R32.8-million excluding long-term incentives.
While operational results were strong, the largest drag on earnings remained the UK motor finance commission matter.
FirstRand expects high single-digit to low double-digit earnings growth in the 2027 financial year. Management anticipates stronger loan growth, continued momentum in deposits and improved operational leverage, while ongoing investments in technology, digital platforms and strategic partnerships such as Optasia are expected to support future growth.
