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Mary Vilakazi is taking FirstRand out of Britain. The chief executive of South Africa's most valuable banking group has classified its entire UK business as held for sale after a British motor finance scandal produced charges exceeding what the unit earned in a decade.
FirstRand's audited results for the year to June 30 show the Aldermore Group, comprising Aldermore Bank and MotoNovo Finance, treated as a discontinued operation under IFRS 5. A sale process is under way, with a confidential information memorandum and virtual data room open to bidders. Non-binding offers are due by the end of September, binding offers by the end of December, and completion is targeted within 12 months.
Group normalised earnings fell 5 percent to £1.81 billion (R39.69 billion), the first decline in six years. Attributable earnings dropped 15 percent to £1.63 billion (R35.75 billion).
What broke it
The group booked an additional pre-tax provision of £518.4 million (R11.3 billion) for customer redress arising from the Financial Conduct Authority's motor finance review, plus £29.4 million of associated costs. Total pre-tax impact reached £547.8 million (R12 billion), or £398 million (R8.715 billion) after tax. The balance sheet provision stood at £749 million (R16.4 billion) at June 30 against £265 million (R5.8 billion) a year earlier, with a gross undiscounted provision of £807 million.
FirstRand said the UK operating environment for consumer finance was increasingly uncertain and that the regulatory landscape created untenable look-back risk, concluding that further capital deployment would not meet its risk appetite or hurdle rates.
The scale of the mismatch is what forced the decision. When FirstRand raised its provision to £750 million in April, it noted that the figure greatly outweighed the £275 million its motor finance division had earned over the previous decade.
Classifying the business for sale also triggered a £171 million (R3.741 billion) goodwill impairment. Transaction and separation costs came to £4.8 million and restructuring charges to £18.1 million. Discontinued operations produced a £121 million (R2.655 billion) loss attributable to ordinary shareholders.
Aldermore's own accounts, published the same day, show statutory pre-tax profit down 74 percent to £51.2 million, while underlying profit fell just 6 percent to £238.9 million.
What remains
Continuing operations grew normalised earnings 13 percent to £2.03 billion (R44.46 billion) at a return on equity of 24.9 percent. FNB earnings rose 12 percent to £1.21 billion (R26.44 billion) and RMB 15 percent to £561 million (R12.29 billion). WesBank fell 4 percent to £105 million (R2.29 billion) on higher impairments despite 14 percent growth in core advances. The credit loss ratio improved to 1.05 percent from 1.08 percent.
The board declared a total ordinary dividend of 539 South African cents, up 16 percent, the group's highest.
FirstRand said the pivot toward South Africa and the rest of Africa should unlock higher earnings growth and improved return on equity over time.
Vilakazi, who grew up in Alexandra, Johannesburg, became FirstRand's first woman chief executive in April 2024, joining from Momentum Metropolitan in 2018 as chief operating officer.
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