FNB has once again produced excellent interim results with strong performances across all its businesses, reflecting the loyal support of customers across Retail and Commercial Segments in the countries in which the Bank operates.
“We are pleased to see that our investment in growth initiatives over the last few years continues to pay off. More importantly, our platform is well positioned for future growth despite the challenging macroeconomic conditions and competitive climate in which we trade across the nine countries,” says Jacques Celliers, FNB CEO commenting on the results.
“Our deliberate, consistent and customer-centric primary-bank-relationship strategy which leverages technology and data capabilities continues to deliver value to all our stakeholders. This strategy not only helps us to acquire new primary relationships from competitors, but also continues to yield results as evidenced by increased up-selling and cross-selling of our ever-expanding range of trusted products and services across transacting, lending, insurance, investments and telecommunication solutions,” adds Celliers.
Over the reporting period, FNB’s efforts to consistently transform its operating platform saw a further increase in the adoption and usage of modern data driven digital channels and electronic payment options. Financial transactions on the FNB APP grew 52% for the period and have now surpassed the volumes on Online banking. Similarly, overall transactional volumes in debit and credit card swipes by customers in SA were up 13% with key sub-segments in Retail running even stronger growth trajectories.
Sales of products and services via FNB’s various digital platforms in both assisted and unassisted environments saw strong take-up from customers. These regular digital interactions with customers allow the Bank to capture more customer data which ultimately assists in offering more targeted and personalised financial solutions, and more trusted and efficient customer interactions.
The 12% lift in profits in the South African business is attributable to the success in both Retail and Commercial with profits up by 11% and 13% respectively.
SA Retail’s performance was driven by exceptional performance from the transactional business supported by increased lending activity primarily aimed at existing banking relationships. Revenue from the Investment and Insurance activities was also up strongly, benefitting from product, distribution and platform innovation over last few years. Recurring premiums (APE) in Life Insurance from over 3 million policies grew 37%.
The SA Commercial Segment profits continue to benefit from a digitally supported customer-centric relationship strategy which has resulted in elevated levels of customer acquisition, cross-sell and improved efficiencies. Continued investment was again made in the local economy with FNB-banked SME limits reaching ZAR50 billion and more simplified lending processes offered to SMEs.
Efforts in agriculture have similarly seen FNB customers benefitting from improved access to funding for emerging black farmers.
Bad debt performance held up well in a difficult set of macroeconomic conditions with the charge moving largely in line with book growth when the impact of the new IFRS9 accounting standard is normalised for.
Deposit growth across the Bank has remained strong with FNB improving its position as the largest retail deposit player in the domestic market. Product innovation digital activation and customer take-up have been key to gain traction in this environment. Similar trends are evident in Commercial where product innovation has led growth.
FNB rest of Africa, after a couple of difficult periods, saw profits lift 21%. The Bank remains committed to continue modernizing mature markets and building scale in new and emerging countries it entered more recently.
The excellent progress in migrating cash from branch to electronic and ADT/SmartBox solutions continues and has allowed the Bank to make further investments in reconfiguring the branch infrastructure and capacity towards sales and advisory activity.
FNB’s approach to making banking more accessible saw eWallet volumes grow to over 20m transactions with value sent up more than 25% to over R12bn for the 6 months to December. The period also saw the introduction of eWallet eXtra, a mobile-only bank account which offers advanced functionality, with over half a billion Rand in funds transacted already.
“Our commitment to youth employment saw 700 youth from disadvantaged backgrounds in SA join the Group’s internship initiative in the 6 months to December and this has now grown to over 900 people, with ZAR110 million committed for the financial year to support this initiative. We are grateful to our employees in FNB who continue delivering on our trusted helpfulness promise. We thank our loyal customers for pushing us harder each day and do not take their support for granted,” concluded Celliers.