FirstRand’s offices in Johannesburg, South Africa. (Gallo Images/Sharon Seretlo).
FirstRand has advised shareholders to expect a modest rise in annual earnings after it was forced to raise an accounting provision to cover its UK-based vehicle finance business, which could be impacted by an industry-wide probe in that country.
The group, which owns FNB, RMB and Westbank locally, said in a trading update on Thursday that a vehicle finance commission by the UK’s Financial Conduct Authority (FCA) had forced it to raise a provision in case its Cardiff-based financier MotoNovo is impacted. The UK probe involves the historical use of discretionary commission arrangements and sales by lenders in the UK motor finance market, with the next steps set to be outlined by FCA at the end of September.
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