Resilient FNB bank a jewel in SA

Johannesburg - First National Bank ("FNB") is a registered commercial bank and one of the biggest four banks in South Africa. It is the oldest bank in South Africa, having been established in 1838 and it now boasts of 7,5 million customers and 38 000 staff members. It is a subsidiary of First Rand Limited.

The bank has focused a major portion of its resources and energy on creating strategic innovative digital banking platforms. A strong e-migration strategy has driven customers to this platform as it offers anytime, anyplace and any-device banking. This strategy has translated to reduced costs of doing business with the bank as it includes taking deposits through the Advanced Deposit Terminals (ADMs) rather than only through the branch network.

FNB has won numerous accolades in recent years from "Best Reputation" to "Most Innovative Bank" owing to its innovative products in the industry such as eWallet (mobile money transfers). The bank's motto of, "How Can We Help You?" resonates with customers, positioning it as a caring bank that makes its customers feel important. This compliments the bank's medium term focus of driving new innovations, investments in Africa and improved customer value propositions.

The FNB strategy is aligned to the overall First Rand strategy of growing domestic franchises in market segments where it is currently under represented and it targets selected African countries for investment as a way to fund their local operations.

FNB has worked on brand visibility as the largest stadium in the country is known as FNB Stadium.

The banks' visibility is also highlighted in its financial performance for the year 2016, the FNB CEO Jacques Celliers attributed the excellent results of an 11% increase in the South African profits to the fact that, "The bank's strong results were produced largely by its focus on transactional clients and a strategy to nurture this key client base. In terms of advances growth in South Africa, we saw that over 90% of all personal loans and more than 70% of credit card limit increases were to our existing main banked client base. By lending to existing transactional customers risks are minimised."

The bank produced impressive results against a backdrop of near standstill economic growth of 0,3% in 2016, weaker commodity prices and a looming sovereign rate down grade of South Africa to sub-investment grade. The results confirmed the resilience of retail and business banking in South Africa.

First Rand Limited trades at R44,90, with a market capitalisation of R251,3 billion and YTD return at -15,74%. The group's consolidated results including FNB Bank posted an impressive Return on Average Equity of 24%, eclipsing its foes. The group is less susceptible to a potential deterioration in the local mortgage market than others. It has a clear opportunity to further increase earnings from credit cards as already alluded to by the FNB CEO, as only 4,4% of the group's earnings and 5,8% of Retail and Business Banking earnings come from this source over and above its principal market share of 33,6% of the Vehicle Asset Finance division.