FNB ups customers by 3% to 10.69mn

South Africa's First National Bank (FNB) recently reported a 31% increase in profits for the first half of its fiscal year, driven by a Return on Equity (ROE) of 39.7%. FNB CEO Jacques Celliers highlighted the bank's strong performance in a challenging economic environment during a recent interview with CNBC Africa. Celliers attributed the positive results to a two-year strategy put in place to navigate the impact of the COVID-19 pandemic and other economic challenges. The CEO expressed satisfaction with the bank's performance over the last six months, noting that they had initially anticipated it would take three years to return to pre-pandemic levels. However, FNB surpassed expectations and achieved its 2019 numbers in just two years. The bank now finds itself well-positioned to face the upcoming credit cycle and benefit from government initiatives aimed at supporting economic growth. Celliers provided insights into the bank's performance, highlighting a 40% profit before tax (PBT) growth in its retail franchise, a 20% growth in the commercial franchise, and a 65% growth in the rest of Africa segment. The bank also saw a 12% increase in transactional volumes, with 800 million logins on its digital platform, setting the stage for further growth and customer support. One of the key areas of success for FNB has been its focus on deposits, which saw a 9% increase. Celliers attributed this growth to product innovation and a market shift towards depositing cash amid lower demand for credit. The bank aims to leverage these deposits to stimulate economic activities and drive growth in the local market. Celliers also addressed the reduction in impairments, which decreased to 2.96 billion. He credited proactive credit provisioning, improved collections activities, and better forecasting for the positive outcome in a challenging economic climate. The CEO emphasized the importance of maintaining a strong balance sheet and implementing modernized operational capacity to offset the impact of impairments on the bank's growth agenda. Digital innovation emerged as a key factor in improving operational margins for FNB. Celliers highlighted the bank's focus on enhancing its value propositions and customer experience through digital channels, allowing for more efficient service delivery to existing clients and attracting new ones. The CEO emphasized the need to stay ahead in terms of digital offerings to remain competitive in the market. Another area of growth for FNB has been its wealth and investment clients, which grew by 12%. Celliers mentioned that while some clients switched from other service providers, the bank also focused on simplifying financial products to attract new clients. By leveraging customer data and personalizing value propositions, FNB aims to continue growing its client base in the wealth and investment segment. When asked about the impact of rising interest rates on clients, Celliers expressed confidence in the bank's ability to manage the situation. FNB has transitioned its credit books to more resilient client segments, allowing for better absorption of interest rate changes. The CEO believes that clients have had time to stabilize their finances and that the bank's current position leaves room for growth despite potential interest rate hikes. Looking ahead, Celliers shared an optimistic outlook for FNB, highlighting growth opportunities across all segments of the bank. With modernized value propositions, a focus on client switching, and a strong credit appetite, FNB aims to increase its market share and drive growth in the coming months. The bank's strategy is centered around existing client relationships, efficient service delivery, and competitive offerings tailored to meet the evolving needs of customers in a dynamic economic environment.