Sept. 11 (Bloomberg) -- South Africa’s gauge of banking stocks rose to the highest level in five months, buoyed by the second-largest lender, which boosted profit by 20 percent and increased its dividend.
The six-member FTSE/JSE Africa Banks Index gained 1.2 percent to 52,981.39, the highest since April 11, by the close in Johannesburg. FirstRand Ltd. reported profit growth of 20 percent and a 33 percent dividend increase yesterday. All of the gauge’s members advanced.
“FirstRand brought out a solid set of results on Tuesday showing strong earnings growth, an increase in dividends and solid return on equity of 22%,” Ryan Wibberley, head of equity dealing for frontier and emerging markets at Investec Asset Management, said by phone from Cape Town today. “This result has given the whole banking sector a shot in the arm.”
South African lenders have underperformed the benchmark 165-member FTSE/JSE Africa All-Share Index by 11 percent this year. The continent’s largest economy is forecast to expand 2 percent this year, the slowest since a 2009 recession, according to the central bank, adding to pressure from a 25.6 percent unemployment rate.
RMB Holdings Ltd., which owns a 34 percent stake in FirstRand, rose 1.3 percent to 44 rand. RMB increased its dividend 36 percent to 1.71 rand per share after earnings, excluding one-time items, jumped 21 percent to 3.59 rand per share, the Johannesburg-based company said today. FirstRand advanced 1.4 percent to 32.75 rand, the highest since April 2.
Standard Bank Group Ltd., Africa’s largest lender, rose 1.3 percent to 114.75 rand, while Nedbank Group Ltd., owned by Old Mutual Plc, the U.K.’s third-largest life insurer, gained 1 percent to 198.01 rand.
To contact the reporter on this story: Jaco Visser in Johannesburg at email@example.com
To contact the editor responsible for this story: Vernon Wessels at firstname.lastname@example.org