FNB adding wealthier clients as it hits 8 million customers in South Africa
Financial services group FNB says it has added 360,000 new retail customers over the last financial year, taking its total active retail customer base to over 8 million.
Reporting its interim results for the six months ending December 2022 on Thursday (2 March), the group showed a significant jump in profits for the period, along with a healthy increase in active customers across its operations.
The group said its upward performance was driven by growth in customers, transactions as well as deposits.
“The results follow recent investments to refresh FNB’s brand and digital interfaces and the renewed focus on being advice-led in our efforts to help customers through our integrated financial services model,” it said.
The group saw a notable uptick in its “private” client base – banking customers earning more than R450,000 a year – which jumped 11% to 1.87 million people. Half of the new retail customers FNB added in the half-year period were in this group (180,000), with the balance being in the “personal” client base.
Including commercial customers, FNB’s South African client base now sits at 9.24 million (up 5%) while total active customers across the entire group also increased by 5% to 11.22 million.
Key highlights are:
- Profit before tax increased by 16% to R15.902 billion
- Deposits increased by 11% to R810.9 billion
- Advances increased by 8% to R507.1 billion
- Overall transaction volumes increased by 15% to 1.8 billion transactions
- Digitally active customers increased by 8% to 6.73 million
- Digital logins by customers totalled 878 million
- eBucks awarded increased by 9% to R1.1 billion
As one of the country’s biggest banks, FNB said it saw a significant increase in people using its digital portals, with logins exceeding 878 million and the FNB app itself contributing 603 logins. EWallet customers were up 6% to 6.36 million.
The FNB App’s active transactional users surpassed 5 million, setting a new monthly record of 103 million logins in October 2022, it said.
“We’re seeing a growing number of customers taking up our digitally displayed offers, with 6.5 million pro-active pre-approved offers taken up in just six months, an increase of 21%.”
“The appetite for digital payments continues to rise, with customers making 41.9 million smart device payments with 3.9 million virtual cards and R15 billion in payments,” said FNB.
In terms of its retail business, the bank paid out R8 billion to first-time property buyers and R40 million in student loans.
The company’s wealth and investments also increased substantially, with the number of premium accounts increasing to 604,000 (up 3%) and a total of R71.5 billion in assets being managed.
Regarding telecommunications, FNB Connect increased the number of active sims to 879,000, up 4%.
The bank reported that its commercial segment’s half-year performance was bolstered by growth in both customers (up 5%) and deposits (up 15%).
FirstRand results
FNB represents the retail and commercial operations of the FirstRand Group.
For the interim period to December 2022, the FirstRand Group reported a 15% jump in normalised earnings to R18 billion, and net asset value up 2% to R166.4 billion.
The group declared an interim dividend of 189 cents per share.
FirstRand said that its growth was driven by a solid underlying operational performance and by continued momentum in new business origination in all of its large lending portfolios.
As reflected in the FNB results this also included excellent growth in deposits and a particularly strong showing by the group’s transactional franchise – measured by customer growth and volumes.
“This strong earnings print, supported by capital optimisation, resulted in a normalised return on equity of 21.8%, which is at the top end of the target range of 18% to 22%. In addition, the group produced R6.2 billion of economic profit, FirstRand’s key measure for shareholder value creation, which is now above pre-pandemic levels,” it said.
In its lending business, the group said that it was still targeting low-risk clients, however.
“Retail lending in secured products, such as residential mortgages and vehicle and asset finance, continues to be focused on low- to medium-risk customers. This mix of advances growth has resulted in some margin compression, but the group believes it continues to capture a higher share of low- and medium-risk business whilst satisfying the needs of customers.”
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