FirstRand Limited (FSR) Earnings Call Transcript & Summary

Welcome to our results presentation for the year ended 30 June 2026. I'll start the presentation with an overview of the macros informing our operating environment. The global policy and geopolitical economic environment remained uncertain and volatile for the year. In fact, as reflected by the Global Policy Uncertainty Index, Policy uncertainty is trending higher. For the group, we've had to navigate the tail end of the impacts of the Liberation Day tariff announcements and the impact of the U.S. Iran war over the past financial year. The recent spikes in oil prices is not only increasing cost of living pressures but also raising government debt service costs. These fiscal pressures are adding to the uncertainty in the global policy environment. Given the importance of these debt markets to the global financial system, and their implications for fiscal and manager policy, the group continues to monitor these developments closely. Global economic uncertainty and financial market volatility remained headwinds across most of the group's portfolio. However, several markets, including South Africa, Nigeria, Ghana and Zambia benefited from ongoing structural reform implementation and positive terms of trade. In South Africa, whilst the U.S. Iran war contributed to the contraction in the final quarter of our year-end, ongoing reform implementation supported stronger full year growth relative to the previous year and should support a recovery within the current financial year. Although the oil price shock interrupted the steady decline in South Africa's inflation and repo rates, the improved structural backlog and commodity price tailwinds helped support the rand and contain the related inflation. This allows the South African Reserve Bank to respond in a measured way to the breach of its inflation target. That said, the increase in inflation and the policy rates weighed on affordability towards the end of the year. The group expects 1 more rate increase over the next few months but as the oil price impact fades over the next year, there should be room for renewed cuts. Our near-term strategies are anchored to this forecast macro outlook improvement. I will now move on to the group's results and unpack our performance. I want to begin by explaining how the group's performance tracked against the guidance. We tracked -- we provided the market when we published our June 2025 results. The earnings growth guidance provided was for -- earnings to grow mid teens. And this was anchored to the operational performances we were expecting from our South Africa and broader Africa businesses. We were clear that the expected earnings growth did not factor in any additional U.K. motor provisions in F' '26, following the Supreme Court's judgment. On this basis, earnings increased 16% at an ROE of 21.5%. It's worth noting that almost all the income statement line items we unpacked in our prospects statement, have tracked in line with the guidance, demonstrating the strong top line growth, improved profitability and returns from FNB and RMB in particular. It is also worth noting that the dividend we are paying is anchored to this level of earnings growth, up 16%, thanks to the group's strong capital position. Two material events shaved current year earnings outcomes and as a result, define the group's ongoing earnings base going forward. Disappointingly, in the end, the group was required to raise the provision following the final publication of the FCA's redress scheme. This impact resulted in normalized earnings contracting 5%. Remarkably, despite the size of this provision, the group's ROE remained within its target range at 18.3%. Secondly, as we announced to shareholders in April, the group has taken a decision to exit the U.K. business finance business, the U.K. consumer finance businesses given the regulatory regime and look back risk. This means that in these results, all the more is now classified as a discontinued operation. The exit process has started we expect 9 binding offers to be submitted by the end of September, following which a due diligence process will start, and then final binding offers will be submitted by December. So continuing operations namely our South African and [ Border ] African businesses is considered the basis for earnings growth, return profile and capital generation going forward. Markos will unpack in detail the bridges shown here, but at a high level, this slide is a reconciliation of earnings and ROE, including and excluding the U.K. provisions. Importantly, on the far right is normalized earnings on a continuing basis. My presentation unpacks the group's performance on this basis. Before I move to continuing operations, I want to cover all the most performance this year. Operationally, the business continued to see positive outcomes from its strategy to unlock shareholder value. There was strong balance sheet growth, supported by an improved technology stack, enabling greater production, improving operational leverage and implementation of capital optimization initiatives. Credit normalized off a low base in the prior year with additional Middle East related provisions raised offsetting the good credit experience throughout the year supported by improved collections efforts. Cost increase above plan as all the more also accelerated the program to offshore a number of roles and incurred additional costs in the process. Additional costs were also incurred by all the more relating to the group's decision to exit the market and prepare for a sales process. But other than that, I think cost control remains very good. What remains disappointing is the ongoing reduction in net interest margin. However, with a new owner with potentially a different funding base, this NIM position should over time, stabilize and improve. This slide unpacks key highlights of the performance by the continuing operations. The call-out for me here is the growth in earnings of 13%, which is a direct result of the operational performances of the franchises, excluding U.K. The ROE which excluding the U.K., is now above our stated range. The cost-to-income ratio at 48% continues to reduce. We have many initiatives underway to further improve the group's operational leverage and our ambition is that this ratio trends down to the mid-40s over the medium term. This is net asset value and NIACC or economic profits presented on a continuing basis for 2 of our important shareholder value metrics. Pleasingly, NAV increased by 9%. The 24% growth in economic profits to ZAR 20 billion is truly impressive. The group's focus has always been on capturing the highest share of economic profits in the markets we operate in. This outcome demonstrates that the growth strategies of our large franchises are still anchored to growing economic profits, resulting in a higher quality earnings and superior return profile. The group's superior ROE benefited from an ongoing improvement in return on assets, which increased another 8 basis points in the period, and it's back at 2018 levels. This was again a result of the quality of our operational performance, particularly the growth in investment income, a strong recovery in trading income and improved impairment. Gearing continues to decrease, meaning that the ROE uplift is not as a result of increased gearing. The structural composition of our ROE reflects the shape of our portfolio today, the strategies we are pursuing and our FRM discipline. This is a snapshot of the operational performances delivered by our client client-facing franchises. They have done very well this year, more than holding their own in a fiercely competitive operating environment. The main call outs here is the earnings growth and improved ROE from FNB, the engine room of the group's earnings which resulted from the size of the deposit franchise, which continues to grow off an ever higher base, the solid advances growth with stronger production volumes and improved credit performance. Cost management was commendable given the increased spend on FNB, expanding its footprint and distribution as well as coming up with new product solutions. RMB really had a standout year, particularly the improvement in ROE. The SA franchises performed well with PBT up 17% and the in-country CIB advances, CIB franchises in broader Africa having a very strong performance. WesBank's performance was characterized by new business production at historic high levels. Earnings were impacted by an increase in impairments as a result of front book strain given the high levels of origination over the past 2 years. Proactive provisioning was taken for the Middle East war and the structural adjustment to the vehicle prices market as a result of increased cheaper cars into the SA market. Outside of these highlighted provisions, the credit experience for WesBank was in line with our expectations and where we are in the cycle. I'll now cover the performance across our standard themes. So let me start with the strength of our origination franchise. This slide unpacks the group's current origination posture. Let me start by saying that this has evolved as we become more constructive on the macros. We continue to focus on capturing an outsized share of high-quality credits, but at the same time, we are leaning in on certain growth themes. Vehicle asset finance is 1 of those themes as we've seen an ongoing demand and structural growth opportunities in the market with new entrants from China. We continue to provide support to SMEs and as the economic activity lifts across household and corporates, we believe this should benefit small and medium-sized businesses. Our corporate and commercial origination thesis continues to be anchored to targeted sectors including those that are early beneficiaries of structural reforms. We continue to lean into sustainable finance as a theme. Capital optimization initiatives have created additional capacity to support lending into a wider cohort of existing customers, particularly in retail and business banking, where FNB is generally under-lent. The strategy to expand lending to a customer cohort previously underserved by us will be supported by the Optasia partnership as they bring different credit scoring capabilities and products that we can leverage into our existing customer base. And cut to some of the themes I've just covered, we saw solid advances growth of 7% across the portfolio. In terms of retail, we saw increased momentum in FNB's retail books, particularly in the second half of the year. WesBank delivered ongoing strong advances growth of 14% and supported by new business volumes in vehicle asset finance and 13% in asset-backed finance. Commercial advances growth, albeit softer this year reflects the benefit of FNB's long-term strategy to focus on sectors exposed to structural reforms and cyclical growth trends. And FNB continues to lean in to support SMEs and and the community economy where advances were up 25%. RMB's origination engine delivered a net new business production of 13% up. RMB continues to exceed the group's sustainable finance target, with ZAR 283 billion having been facilitated since 2022. RMB continues to focus on capturing structuring and advisory fees through the origination franchise, and this has resulted in enhanced margins and ROE through the distribution activities. Distribution of assets came to ZAR 43 billion this year, impacting the advances growth for RMB, which is up 2%. Excluding RMB's distribution activities, group advances would have been up 10%, a pleasing outcome. And for me, a testament to the growing set of opportunities that are available to the group's franchises for growth. This slide is a high-level snapshot of the group's improved credit performance. Markos will cover this in much more detail in his presentation. But favorable macro macro conditions provided support for most of the year. Although in the final quarter, some additional FLI provisions were raised due to the geopolitical uncertainty emanating from the Middle East conflict. It's pleasing that despite proactive additional provisioning of ZAR 1.1 billion, the credit performance still contributed positively to the group's operational performance. Impairments would have decreased by 6%, and instead of being 2% up on last year. Good to see the change in profile. The group benefited from the treasury's active management of interest rates and ALM risks. Sorry, my slides are not cooperating -- go back. The group benefited from the Group Treasury's ongoing active management of interest rates and ALM risks ensuring the group earns appropriate value from interest rates, credit and liquidity premium. In the current year, continued disciplined execution of this strategy produced ZAR 3.3 billion of NII above the overnight policy rate. The ALM framework is set to produce resilient outcomes, taking into account various tested scenarios designed to protect and enhance the group's earnings with lower volatility. As a reminder to shareholders, the strategy has delivered ZAR 19.5 billion since inception in 2018. This graph demonstrates the strength of the group's deposit franchise with cumulative 10-year growth of 34% ahead of the aggregate money supply growth. This outcome reflects strong diversified main bank relationships across various client segments, supported by a very good product offering that enable our customers to access savings and liquidity easily throughout their life cycles. The group has deliberately focus on ensuring that savers are appropriately rewarded across the multiple savings and deposit offerings. The scale and quality of this franchise supports a superior risk-adjusted NII, which underpins the group's ROE. A key highlight for me is the group's margin that increased by 29 basis points supported by disciplined FRM execution across the franchises, which balance growth with risk-adjusted returns and asset mix. Asset margins contributed 12 basis points with improvements in deposit mix and funding costs, adding a further 13 basis points. The group's ALM strategy is fully protected the structural interest rate position against the 89 basis points reduction in policy rates with capital environment, including ALM, contributing 4 basis points. This was partly offset by lower returns on liquid assets in Group Treasury, while broader Africa again contributed positively to group margin. I will now Okay. Thank you. I will now cover the contribution from the group's diversified and growing sources of NIR. The group continues to benefit from its long-term strategy to grow new sources of net interest revenue. However, it is impressive to see that the fee and commission income line despite a very high base and fierce competition pressures, it's still delivering solid growth. RMB's strategy to capture structuring and advisory fees as part of the origination strategy contributed strongly to and the global markets business recovery delivered excellent trading income. Once again, RMB's private equity businesses produced both healthy levels of dividends, ongoing earnings and realizations. FNB's overall NIR continues to reflect its strategy to defend and grow its transactional franchise. This slide shows that the business continues to achieve steady growth across traditional sources of fees and is importantly scaling new sources of fees as some of these fees structurally reduce in the market. Digital, wireless and PayShap are showing very strong growth particularly following the decision to make PayShap its default real-time payment solution on the FNB app. The graph in the middle demonstrates ongoing strong traction in FNB's long-standing strategy to monetize its platform by providing numerous value-added services. FNB Connect is scaling strongly with over 3 million users transacting on its platform in addition to having 1 million users on the MVNO license doing very well. Markos will unpack in more detail the insurance performance, profit growth was dampened by ongoing investments in distribution and advisory capacity. Pleasingly, short-term insurance reached profitability this year, an important milestone for this business, and there's still plenty of runway in both retail and commercial customer bases. Good growth continues to be generated on the group's own licenses as reflected in the new business APE numbers on this slide. The growth in the in-force APE for both life and short term demonstrates the quality of these books. FNB Life business continues to be a key contributor to the group's NIR having paid ZAR 9.5 billion in dividends since inception to the group. Our invest strategy is also a key part of our net interest -- noninterest revenue diversification strategy and growing our client franchises. It deepens entrenchment, supports cross-sell and generates capital-light income. Invest has not yet scaled as quickly as insurance. However, I believe we are finally seeing better traction, particularly since we took the decision to focus on servicing the needs of our own customer base. This has resulted in both inflows from Ashburton and FNB wealth and investments on the back of consistent investment performance and expanding distribution. Ashburton received close to 60% of its inflows from RMB's corporate client base, which has been as a result of a successful fixed income strategy. FNB was an investment is scaling its cross-sell to own customers and penetration is still low. So there is still a lot of runway for growth for this business. I have already mentioned I've already mentioned the positive contribution to NIR from the recovery in RMB's global markets business. As can be seen from this slide, the recovery was broad-based across the business. And a number of these activities are almost back to 2024 levels. Pleasingly, the performance came from increased client flows in line with strategy. There are strong signs that this performance is sustainable. The derisking decisions we took last year have removed concentrations and freed up capacity to maximize opportunities as demonstrated by the team during this past year. The implementation of some technology platform refinements is providing the global markets business with increased capabilities that is scalable. The final point I'd like to make here is that RMB's recent operating model change to support a more client-centric strategy will also provide support to global markets. There is increased focus in RMB on cross-selling Global Markets products into the existing broader corporate client base and the results are encouraging. And furthermore, the successful scaling of the corporate transactional banking will also provide further support to global markets growth. I will now spend some time adding a bit more color to the operational performances of the franchises that I've already called out before handing over to Markos. I've called out the excellent -- clicker and me today are not doing well. I've already called out the excellent growth in PBT from FNB. If we drill down to some of the detail, we can see that this was driven by customer growth higher advances growth in both unsecured and residential mortgages, cross-sell and ongoing deposit gathering. When considering the customer growth per segment, it's important to provide context to FNB's strategy to focus on providing customers with products and solutions appropriate to where the customers are in their life cycle. This means that close to 300,000 customers migrate annually from the personal segment to the private segment. Hence, we refer to pre- and post-migration. Despite fierce competition, the personal segment did well to grow customers. More impressively by this segment is the growth in deposits, up 16% before migration. The private segment grew a solid 8% grew the customer growth, solid 8% driven by new customer acquisitions and migrations. Private segment continues to focus on increasing specialists and advisory skills to unlock more specialist lending and broader lending into the client base, including a homecoming efforts to ensure that all our private segment customers are well looked after by us and not our competitors. And the results are evident in the record production and periods across a number of asset classes. FNB is also benefiting from the partnership strategy, which we look to add capabilities, distribution and footprint. Distribution has been enhanced through the Pick n Pay and Boxer partnerships. There are also some exciting product launches imminent developed with Optasia, which will see FNB strategy, which will see FNB's strategy expanding its lending activities. I believe that the launch is imminent in next [indiscernible] Another important growth strategy for FNB is the community economy. We have seen strong advances growth. But just as importantly, FNB continues to strengthen its position in community-based savings through its stock fell value proposition. Impressively, deposits increased this year by 31% to ZAR 5.7 billion on the Stokvel platform with active accounts growing 23%. FNB commercial customer growth continues to show good momentum, generating growth in transactional volumes and lending. The commercial deposit franchise remains by far the largest in South Africa. SME lending continues to be a focus area, which was a driver to the 25% increase in advances in the community economy. Merchant acquiring activities have started to improve since the launch of the refreshed product and device offering in March, post the repricing of fees in an increasingly competitive space. Since the relaunch, we have given back in pricing benefits to existing merchants a total of ZAR 150 million. Pleasingly, sales volumes have lifted 36% since the relaunch in March and momentum continues to be encouraging and ensuring that we maintain our market share in this space. I've already covered the strong origination in WesBank and the result in new business strain. One of the additional call-outs I would like to make on this slide is that we saw very pleasing growth in the origination from the collaboration between WesBank and FNB's Personal segment in particular. WesBank continues to grow strongly in other business activities as well that are not on balance sheet through the joint ventures and partnership arrangements with OEMs, diversifying its sources of revenue, whilst enabling its partners to grow as well. Lastly, WesBank still continues to capture the majority of the economic profits in the sector in South Africa. RMB delivered a very strong operational performance across its client-facing businesses. The Investment Banking division continued to deliver strong results across a wide range of lending and advisory activities with an increasing focus on capital-light activities. The South African franchise performed very well with PBT up 17% and broader Africa contributed PBT up of 11% which included the stellar in-country CIB growth of 53%. RMB's ROE improvements to 23% has been particularly pleasing to see 11% last reach in 2018. The HSBC transaction has successfully completed, introducing over 400 entities into the group with a large multinational corporate base. The quality of the HSBC deposit book was also accretive to RMB's margin. Lastly, the client-centric operates in model change in RMB while still in an early phase is showing very good traction with early runs on the scoreboard, increasing our confidence in the continued growth of the RMB franchise. The performance from the broader Africa portfolio is also pleasing despite the macro pressures in Botswana, one of our larger jurisdictions. The overall profitability held up well, supported by good performances from Namibia, Zambia and Nigeria. The in-country CIB franchises across the portfolio saw a very strong performance supported by the structural reform momentum in these markets. A special callout to Zambia this year for delivery of excellent growth across a number of metrics, including paying a maiden dividend. Thank you. Presented on this slide is a walk-through of the group's CET1 position that has maintained at elevated levels. The group accreted capital of 79 basis points, with the incremental motor commission provision consuming 75 basis points. A CET1 ratio of 13.9% at the end of the reporting period is well ahead of the upper range of the internal target range of 12.5%, which translates into excess capital of ZAR 10 billion after payment of the final dividend. The strong capital position supports a dividend cover of 1.6x at the bottom end of the board's target range. This cover translates into growth in full year dividends per share anchored to earnings growth, excluding the current year motor provision, resulting in dividends being up 16%. Okay. I'll now hand over to Markos. Markos?

Thank you, Mary, and good morning, everyone. As Mary highlighted earlier, the group's 30 June 2026 financial performance has been contextualized and unpacked in distinct components that reflect the financial outcomes of the group. These include the additional U.K. motor commission provision, Aldermore as a discontinued operation and the continuing operations of the group that comprise of the South Africa and broader Africa franchises. I will unpack these and the key performance drivers individually throughout the presentation, but we'll first walk you through a performance bridge that reconciles the earnings lenses and how they manifest in the results. Firstly, before normalizing for the provision, the group's earnings have disappointingly contracted 5%. Despite this, the ROE remained above the bottom end of the stated range at 18.3%, and and still resulted in economic profit generation, albeit down year-on-year. In April this year, the group guided that it estimated a provision of GBP 750 million would be required to address the potential outcomes of the FCA industry-wide motor redress scheme. The final outcome resulted in an overall group earnings impact for both the provision raised and the related costs incurred in the current period of GBP 403 million or ZAR 8.7 billion. I will unpack the provision further in a few slides. Due to its nature and size, the group has decided to simplify the understanding and comparability of the operational performance, but separately discloses all of the relevant information related to the matter in the booklet and financial statements. After normalizing for the provision, the group's earnings are up 16%. And as Mary highlighted, this is the anchor that the Board utilized to declare the group's dividend for the period. The final step is then to normalize the provision in the comparative period to obtain a like-for-like comparison of the group's overall normalized performance, which is up 10%. This can then be decomposed into 2 parts. The discontinued operations performance, which is 14% down in rands and 11% down in pounds, offset by a very strong performance by the continuing operations, which are up 13% at an ROE of 24.9%. The final bridge then reconciles the flow-through of the provision normalization into NAV. I would reiterate over that the group's actual capital position remains anchored to the IFRS NAV position. What this slide is useful for doing is to assist in unpacking the discontinued operations normalized NAV, which reduced 16% in rands and was driven by, firstly, the positive impact of increased earnings to June 2026, offset by the inaugural dividend paid last year in September of GBP 125 million or ZAR 2.8 billion; and secondly, a large impact is due to rand translation off the back of a stronger rand at June this year. And finally, as the group under IFRS classifies the Aldermore Group as an asset held for sale now, it was required to perform an impairment test of the goodwill recognized at the acquisition of Aldermore. However, to determine any potential impairment, the group had to prepare a probability-weighted accounting model of various potential valuation outcomes as the exit process is not yet at the formal offer stage. The impairment calculated is ZAR 3.7 billion, which results in ZAR 3.8 billion of remaining goodwill carried on the balance sheet at 30 June 2026. As a final technical call-out in accordance with [ SYCA ] and JSE rules. This impairment is reported outside of headline earnings, and hence is also not included in normalized earnings. The detail of this can be found in the group's headline earnings reconciliation. To conclude on this slide, I also want to note that the discontinued operations normalized NAV of ZAR 42.9 billion comprises a normalized consolidated view of the Aldermore Group and that the underlying actual 30 June 2026 stand-alone reported book capital of Aldermore is GBP 1.65 billion or ZAR 35 billion. Mary has already covered some of the key performance metrics of the group and call-outs from my side are the improvement in the normalized ROE and ROA across both total and continuing operations. driven by good top line growth and improved operational leverage. Furthermore, the group remains well capitalized at a CET1 ratio of 13.9%. And as noted earlier, despite the decline in earnings of 5%. This strong capital position allowed for the dividend per share to be increased by 16%. Turning to the U.K. Motor Commission provision outcome. At the end of March 2026, the U.K.'s Financial Conduct Authority published its final policy statement related to its industry-wide U.K. motor commission rerisking. Whilst the group remains firmly of the view that the final scheme is disproportionate and unfair, it disappointingly had to raise an additional pretax accounting provision of GBP 518 million. In addition, the redress scheme has subsequently been challenged by other lenders and the consumer body which resulted in an extension of the potential start date of the scheme, and this results in additional interest and operating cost considerations in operationalizing the scheme. This increased the group's guided undiscounted provision from GBP 750 million to GBP 807 million. But notably, for IFRS reporting purposes, this provision is discounted to 30 June 2026, resulting in the final balance sheet provision of GBP 756 million. Management has prudently struck the provision in accordance with the detailed requirements as set out in the FCA policy statement and its judgment related to the take-up rates is broadly similar to those noted in the proposed underlying redress scheme estimates. In summary, the net earnings impact to the group for the current period is ZAR 8.7 billion with a cumulative provision raised to date of ZAR 16.4 billion. Mary has given some reflection on the U.K. operations performance, and I will unpack this further. Aldermore's NII grew 1% as margin pressure offset strong balance sheet production with advances and deposits up 13% and 12%, respectively. Advances growth included the acquisition of Octane Capital, which adds adjacent higher-margin, bespoke bridging refurbishment and development property finance opportunities. The lower interest rate environment weighed on unhedged capital endowment and deposit margins were impacted by market-wide competitive pricing pressures. Advances margins declined due to balance sheet mix or stronger growth tilted towards lower-margin property lending during the period. The net result of all of this was a NIM contraction of 19 basis points in pounds. The CLR normalized up to 25 basis points from a 10 basis points print in the prior period that included FLI costs of living releases as well as cumulative positive impact from the previous [indiscernible] the last year portfolio. Overall credit performance was in line with expectations with an improved NPL ratio of 3.03%. And Aldermore also strengthened its collection capabilities, which are reflected in its improving arrears and post write-off recoveries. This good credit performance was then offset by a deterioration in the forward-looking macros as a result of worsening inflation and rate outlooks post the Middle East conflict escalation in the fourth quarter. This resulted in an additional FLI being raised of GBP 12 million. Operating expenses were well managed at 2% up despite some large nonrecurring costs of GBP 18.1 million related to its offshoring and restructuring program which resulted in the offshoring of more than 800 roles. This will enable the business to operate at a structurally lower CTI over the next 3 to 4 years as the offshoring contracted savings profile realizes. In addition, in preparation for the FirstRand exit process, Aldermore incurred additional costs of GBP 4.8 million. As an overall conclusion, the Aldermore Group continues to execute on its strategy to reduce the cost-to-income ratio to under 40%, diversifying growth specialized lending and adjacent activities and trended ROE up towards 15% over the next 4-year period. I will now impact the continuing operations, which produced a strong performance with normalized earnings increasing 13% off the back of strong top line growth and positive cost jaws. NII increased 8% with all balance sheet activities leading to improved outcomes despite the rate cutting cycle and the average repo rate declining 89 basis points. Lending NII increased 7%, driven by resilient growth in average customer advances with an improved production across most portfolios, particularly in the second half of the year as well as margin expansion driven by advances mix. In addition, RMB's distribution strategy is a significant contributor to the group's lending asset margin expansion of 12 basis points. Transactional NII increased 8%, reflecting increased Transact product offerings and customer acquisition, which included good growth in overdraft and revolving facilities. This was partially offset by the net endowment impact of lower rates that included the positive outcome in the ALM strategy that Mary highlighted earlier. Investment deposits NII growth of 11% was underpinned by targeted customer engagement pricing enhancements and continued shift in customer preference towards higher-yielding savings and investment balances. Despite lower rates, the group's capital endowment increased 5%, driven by stronger earnings from the ALM portfolio, which included investing more of the group's capital into a structural bond portfolio. Group Treasury NII increased 42%, benefiting from balance sheet growth, reduced institutional funding costs and improved deployment of foreign currency funding. An important call out is that whilst NII growth in Group Treasury is very positive, the overall margin of the group has been negatively impacted by 2 basis points due to a change in balance sheet composition towards lower-yielding liquid assets. Finally, FNB brought Africa's NII grew 6% despite ongoing macroeconomic pressure across the portfolio, mainly supported by strong average deposit growth up 12%. Mary has already unpacked Advances growth, and this slide highlights the second half pickup in production as easing inflation and lower rates allowed for better customer affordability. Annualizing the second 6-month growth reflects the improved run rate across most portfolios. Furthermore, RMB's advances growth appears subdued at 2%. But as Mary alluded to earlier, it is a direct result of the RMB distribution strategy which resulted in an improved RMB advances margin of 10 basis points. The growth was further subdued by rand strength against the dollar towards the latter part of the financial period. The deposit franchise continues to deliver excellent outcomes once again exceeding expectations and is up 10% for the period. This good performance reduces the need for more expensive institutional and other funding, which grew 3% overall. Notably, FNB's SA retail and commercial deposit franchises continued to deliver a strong performance and collectively now contribute in excess of ZAR 1 trillion to the group's SA funding portfolio. RMB's domestic deposit franchise delivered robust growth, up 15%, driven by a focus on growing operational balances through primary bank clients as well as the take on of the HSBC deposits, which contributed an additional 4% to balances. The increase in institutional funding reflects ongoing investor demand for marketable FirstRand paper and is further supported by higher national treasury tax and loan balances, particularly in the latter half of the year. Debt securities growth includes the commencement of the group's issuance of FLAC as part of FirstRand's strategy to replace maturing senior unsecured debt instruments previously issued by FirstRand Bank, with FLAC now issued from FirstRand Limited. All of these NII outcomes resulted in an impressive 29 basis points increase in group margins and our direct outcomes of the deliberate pricing and mix strategies via its FRM capabilities. Turning to the group's impairment charge, which increased 2%. Notably, this outcome was achieved despite the group raising a significant ZAR 1.1 billion of additional FLI provisions in the last month of the year. Given the change in macroeconomic outlook to GDP, inflation and rates from the Middle East conflict and related oil price disruption, Mary's macro slides positioned this change visually and for ease of reference, I will refer to this as additional FLI in the rest of the presentation. Excluding the impact, the group impairment charge would have decreased 6% with the Group's overall credit performance remaining resilient and provisioning seen as appropriate for the current environment. In addition, the group's continuing operations TTC range is based on its current portfolio mix and is set at 100 to 130 basis points. And at 105 basis points, the group delivered an outcome at the bottom end of this range. Unpacking impairments further using a 6-monthly rolling CLR and impairment charge as well as separately disclosing the additional FLI impact better reflects the overall improved credit performance of the portfolio as accelerates and the inflation eased. This is particularly evident in the second half of the year with an annualized CLR of 91 basis points and a significantly improved rolling 6-month impairment charge at ZAR 6.2 billion. In addition, the group's balance sheet provision stage mix and coverage remains prudently struck for the cycle and is broadly similar to the prior year. I will now unpack the drivers of the impairment charge in the underlying portfolios. The overall SA retail impairment charge increased moderately at 3% and while the CLR declined to 192 basis points moving into the lower end of the portfolio's TTC range. The retail secured impairment charge reduced 9% with the CLR reducing to 55 basis points and comprised a diverging performance between the residential mortgages and WesBank VAF portfolios, but both remain in line with expectations for the cycle and their respective book growth. The residential mortgages CLR printed a negative 2 basis points benefiting from slower advances growth, coupled with better-than-expected house price index data, lower rates supporting customer affordability and slowing debt counselling inflows. These benefits were partially offset by the modeled additional FLI provisions. WesBank VAF impairments increased 29% with a CLR of 177 basis points, but the increase is predominantly spoken for by 3 main outcomes. The strong advances growth of 15% and and what I call good impairment growth in the form of front book strain, which also included a measured easing of underwriting criteria as the cycle became more supportive, but also then requiring higher performing provision coverage. Secondly, the group raised a judgmental post-model adjustment to cater for the underlying uncertainty and lack of historical data related to used vehicle price impacts of low-cost new entrants to the South African market. And lastly, -- the last item is the additional model FLI provision required that I've mentioned before. The retail unsecured impairment charge increased 7% and was driven mainly by front book strain and additional modeled FLI provisions in personal loans. Furthermore, card produced an improved credit outcome off the back of better customer repayment behavior. Commercial impairments declined 3% to a CLR of 92 basis points despite continued good advances growth of 9% and and is reflective of the improved underlying credit performance across the portfolio as well as the nonrepeat of the 2 large defaults I called out in the prior year. The corporate impairment charge increased 26%, and the overall portfolio remained resilient and in line with expectations. The increase reflects the impact of a few large exposures migrating to Stage 3 in both the IBD and private equity portfolios. These were counter specific circumstances and are not considered pervasive to the portfolio. This increase was then partly offset by the debt to equity restructure I noted at the interim presentation, which has a 3 basis points impact to the printed CLR. Finally, considering the macro backdrop, the broader Africa in country portfolio impairment charge performed better than expected, declining 13%, driven mainly driven by lower write-offs in Namibia, improved customer affordability and better collections resulting in improving arrears. This was partly offset by strong advances growth in front book strain, particularly in Zambia's corporate and commercial portfolios as well as an increased impairment charge in Botswana due to the current country-specific pressures. The group delivered a significant increase in NIR of 12%. And with growth benefiting from the continued execution of the NIR diversification strategies Mary covered earlier. Pleasingly, group NIR exceeded ZAR 65 billion with an improved NIR mix and a reducing contribution from fee and commission income. Total group fee and commission income grew 6% with a mixed performance between FNB and RMB. FNB increased 8%, driven by customer acquisition and continued growth in transactional volumes. This helped offset some of the structural pressures from changes in the payments landscape that Mary mentioned earlier. RMB IBD's knowledge-based fee income continues to grow strongly for a high base, but this was offset by lower trade and working capital commitment fees and less trade-related structuring opportunities compared to the prior period. As a final call out, the asset management business delivered a strong growth in management fees, driven by a 35% increase in AUM with total management and fiduciary fees now greater than ZAR 3 billion. Mary summarized the insurance operational performance and drivers. These resulted in a solid top line performance, up 12%, but then offset by higher insurance service expenses that reflects the good book growth, increased weather-related claims and higher acquisition and servicing costs. These additional costs included an increased investment in distribution capacity and advisers as well as investment in improving system capabilities. The net result of this is insurance income printing up 8% year-on-year. The 42% increase in trading income was as a result of a strong rebound in the Global Markets business. Mary covered this earlier, -- but my call out is that with the Global Markets reset, having delivered a promising performance in year 1 as all the asset classes benefited from higher structuring activity, improved flows and growing market-making opportunities. The investment income slide speaks for itself with an impressive income growth across all activities. Private equity contributed strong growth from realizations and dividend income during the period. its equity accounted earnings also remained resilient, considering the sizable realizations over the past 2 years, and the unrealized value of the portfolio is still around that ZAR 8 billion level. Other investment income includes a strong group treasury performance as a result of changes in market dynamics, which resulted in a value unlock from the rebalancing of its bond portfolios. The WesBank Associates, TFS and VWFS performed well with good advances growth, coupled with disciplined cost management, leading to better equity accounted income for the group. As a reminder from the interim presentation, VWFS benefited from a once-off ZAR 150 million funding and liquidity benefit during the period. Lastly, Optasia's contribution to NIR reflects the group's share of its earnings at 20.1% for the 5 months and 26.1% for 3 months of the year. And as Optasia has listed and has not released results, the group's share of associate earnings are based on its best estimate using Optasia's latest trading update. Operating costs are up 9% and slightly ahead of expectations. Staff costs make up around 64% of the total group cost base and increased 9%. This increase is mainly due to staff inflation, variable costs and head count growth. Professional fees increased 14%, reflecting additional investment required for platform-related projects, including one-off costs for the HSBC deal implementation. Computer expenses increased due to higher software licensing costs from the expanded use of cloud, AI and software services for ongoing digital transformation, partially offset by the impact of a stronger rand on foreign currency IT spend. This increase also includes a ZAR 290 million impact from the upgrade and deployment of a system in Ghana. The group continues to focus on its operational leverage and has matured the embedment of costs as a finite financial resource in its FRM frameworks. This will ensure that it is able to continue to deliver on this positive cost story reflected in the graph. Since 2022, the group's cost-to-income ratio has declined by 4% to 48.5%, with the continuing operations at 48%. So in summary, the group absorbed a large impact to earnings from the additional U.K. motor provision. It has been a transitional year for the Aldermore Group strategy to improve returns in its sustainable growth trajectory, and the continuing operations delivered a very strong overall earnings outcome and ROE for shareholders. I'll now hand you back to Mary as she concludes with the group's forward-looking prospects.

Okay. We're almost there. Thank you, Markos. I will now cover some forward-looking topics. I want to start by confirming that the group has revised upwards its guidance for earnings growth and ROE. The new targeted range for ROE has been moved from 18% to 22% to 21% to 26%. We have tightened earnings growth guidance to high single digit to low double-digit growth. I want to emphasize that these are through the cycle target, which means that at any given point in time, depending on growth opportunities, we can choose to be at the upper end or the lower end of the ROE range. I think key priority going forward is going to be focusing on growth. I'd like to share some of the insights from our strategy, which I hope we'll be able to give you insights on why we feel confident to revise our guidance going forward. Firstly, we have refined our strategic framework, which reflects the exit from the U.K. to focus on South Africa and broader Africa. We believe this pivot in strategy and resource allocation should over time, unlock higher levels of earnings growth and enhanced ROE. These jurisdictions are characterized by improving macroeconomic environments, stronger GDP growth prospects, new trade and capital flows and of which will provide further growth opportunities for RMB, FNB and WesBank. And I believe they are strongly positioned to capture those tailwinds. We've also created a new enterprise-wide enablement capabilities which will contribute to softer execution of strategy and speed to market and unlock operational efficiencies. In South Africa, we need to protect and grow our large valuable customer-facing franchises. It's clear from this slide the size and quality of these franchises. And there's always been a naggling doubts expressed that it becomes harder to grow businesses like this, particularly with tough macros. I think the operational performance is delivered by our current jewels in the past and in the year under review, demonstrates that there is growth runway. And some of the strategic interventions we have executed on are beginning to either gain traction or scale. What we can see from this year's results is that we can grow customers, lend to those customers, cross-sell multiple financial services, products and solutions. And in that process, protect and enhance client franchises and returns. We are focused on ensuring that we have greater relevance to our customers and add value to their lives and businesses. This is key to retention and growth. The other shift in our strategy is that the management teams that manage the large SA franchises are now mandated to grow in broader Africa, working with the in-country businesses. This has always been the case for RMB, but different for the other franchises. So the segment leadership success is, therefore, much more closely aligned to the future success of the broader Africa portfolio. Over and above the imperative to protect and grow the jewels in the crown, we also have multiple new strategies that will provide run good growth runway over the short to medium term. This slide unpacks these opportunity sets, which span across all franchises. Most of them are already under execution. Firstly, there are businesses where we are underweight our natural market share of the market. This will include corporate transactional banking, invest insurance and global market businesses. Despite its success so far, there's still a great deal of growth to unlock from the insurance business. Penetration of insurance solutions is still low in the retail and commercial customer base. And the same can be said for our invest activities that are also at a much earlier stage of execution. In addition, ultimately, these exciting Ultimately, these present exciting open market opportunities for the group in the longer term, growing beyond our existing customer base. The group's strategy to partner to augment its own capabilities for scale, expanding distribution is nascent, but it is showing encouraging growth. FNB is rolling out the first of our products developed with Optasia this month, but we are excited by the optionality this partner brings to the group. We also continue to look for other partnerships. As I mentioned earlier, scaling our corporate bank is also critical. In particular, it will bring access to more client flows and more clients to enable cross-sell across our commercial and corporate clients. This will place our Global Markets business on a very strong footing. We continue to look for bolt-on acquisitions to scale in-country franchises. Zambia is an example of a greenfield business that has scaled quickly, and the recent acquisition of Standard Charter's business there will add a further 80,000 customers, a sizable dollar balance sheet and enhance the world's customer proposition for this business, which we intend to take to other markets. Finally, we are exploring opportunities to enter new markets on the continent as we expand our footprint. This should not be seen as a flag planting exercise, and we will not necessarily enter these markets through acquiring banks only. As I mentioned under the strategic framework, we have created 2 enterprise-wide groupings, 1 that houses the technology capabilities of the group and 1 that manages the group's shared services. Group Technology and Engineering, which is run by Kevin Mitchell, the Group Chief Digital Officer, is mandated to provide technology capabilities that are common to all businesses and are considered group platforms with the necessary prioritization to ensure we support growth initiatives at scale. This will resolve the duplication of efforts that has existed when these capabilities all live in separate franchises and separate businesses. This better allows our technology teams to be more effective and operate efficiently, both in group technology and engineering and in the segments. Gert Kruger was recently appointed the Group Chief Operating Officer, and he has responsibility for the shared services portfolio and works closely with Kevin on overall enablement. Importantly, this construct allows the group to organize and embed artificial intelligence capabilities in an organized manner, driving efficiencies and speed through AI-enabled development capacity in technology and engineering where these tools have been rolled out across more than 3,000 engineers in the group. AI is also being deployed to enhance customer experiences and products and group business services, automating, business services and our processes. Pleasingly, there are several use cases that have moved into deployment thus far and we believe that the dividend from an efficiency perspective and customer experience for our customers is going to be enhanced. I believe that the creation of these groupings and clarity on their mandates means that the legacy duplication and inefficiencies created by all silos will be eliminated. This will unlock great operational leverage, which is 1 of our key commitments to shareholders. The refined strategic framework does not shift our capital allocation philosophy. The group's view of FRM as an enabler to our segments and a pillar of its value proposition to shareholders is clear. The consistent execution of strategy via segments with disciplined FRM has shown to deliver value to shareholders over many years. The outcome of which has been our ability to grow net asset value at a CAGR of 8% and and grow dividends at a CAGR of over 14%, returning ZAR 200 billion to shareholders over the last 10 years. Also remembering that this period included the COVID stress period, and the U.K. provision. So really strong outcomes from our FRM disciplines. So the reason I wanted to put this slide up is to deal with 2 questions. One, what are we going to do with the excess capital. Shareholders can take comfort in knowing that we will deploy it to ensure that we invest in strategies that are going to create value in the end. We will look at organic and inorganic strategies. We've got quite a number of plans that are underway that that we are hoping to execute on. And hence, the excess capital is retained within the group. The second point I wanted to also just cover is the point around what are you going to do with the proceeds from the Aldermore sale? And the short answer is that we will go again through the capital allocation framework and have a look and see if there are opportunities that the group can deploy their capital into for better returns and if there are no such opportunities, we certainly will not sit on the cash from the disposal. I hope that's as much time as we have to spend on that particular topic. The management team certainly knows what to do with excess capital, and we know how to return it that's required to shareholders. In closing, FirstRand is on track to deliver another strong operational performance in F '27. Meeting the new ROE and growth commitments. We expect to deliver earnings growth around the midpoint of the earnings range which we have announced. High single-digit growth in NII, a strong NIR trajectory and improving credit outcomes. The combination of a growing top line and an increased focus on managing costs will result in positive jaws, something this management team has fully committed to. And in closing, let me start by thinking Harry Kellan who has been with the group for more than 22 years and has been a great custodian in the various roles that he has played with the group. Harry, I hope you have been sitting here feeling very proud about the delivery of the FNB franchise, which you look after over the last 2 years. And when you step down for early retirement, we wish you all the best for the journey ahead, and we hope to see you around. Ms. Harry. And lastly, thank you to our customers across the group. Your trust in us inspires us to innovate, to support your current and evolving needs. And thank you to the employees of FirstRand across all our jurisdictions. We are the people that are responsible for delivering the good results that we have just unpacked today, and you are the people that are going to ensure that we meet our shareholder commitments and customer commitments going forward. I will now pause to take any questions if we still have any time left. Thank you for joining us.

Are there any questions in the room? James' hand is up.

Good afternoon. Congratulations on a strong operating performance. Three questions from me, 2 on credit and 1 on NIR. The first -- the 2 on credit. Just regarding the revised credit loss ratio range, 100 to 130 basis points. Apart from the U.K. impact, have there been any other changes to the -- through the cycle ranges at a product level? The second related question on WesBank and the adjustment for vehicle prices? Is that all now in? Or do you expect further pressure ahead as we move through and then just on NIR, particularly impressive expansion in trading and fair value revenues. How should we think about growth in that dimension going forward?

For Markos. .

All right. Thanks, James. So the range has remained 100 to 130 basis points, and we've called it out before at that level. The main change was in retail, where it's increased by about 10 basis points, I think, in terms of its range mainly off the back of the unsecured growth being faster than the secured over the past period. So it's just an adjustment, but it's small enough that it doesn't impact the group range. On the WesBank piece, again, I mean, this is an out-of-model adjustment the team have had to build because we don't have the data available yet to see what vehicle prices are going to do. But as you can expect from first and we've tried to be conservative.

NIR.

And then the last point on NIR on fair value. I mean RMBs, a rebound in markets were strong in the year. But if you go back to look at historical levels, -- there's still a bit of growth and runway left there for that team and they continue to execute on a plan where let's call it reset. One is done and they're in Phase 2 of that now.

Okay. Thank you. That broadening of the CLR or 10 points in unsecured, does that reflect a greater appetite for unsecured? .

Yes. So it would reflect that unsecured is going to grow faster than secured in the portfolio, and that would mean in terms of it, there's a slight tilt towards that portfolio. And it would come from some of the growth activities Mary mentioned, like Optasia and the lending activity from that over time.

And do you have the infrastructure to manage that credit risk?

Yes, we believe.

We do.

Yes.

Okay. No questions. No further questions in the room it would appear so should we go online.

Thanks, Mary. We have questions from Baron Nkomo and Charles Russell. We'll start with Baron's question. He's got 2 questions. Where do you expect net interest income growth to come from in FY '27, volume, margin or mix? And what could derail that? And second question, what specific cost levers will drive the targeted improvement in the cost-to-income ratio next year while you continue investing in technology?

Markos, I think those also sounded like your questions.

Thanks, Mary. What is the first one?

Where's the NII growth has come from.

Yes. The NII growth will be predominantly volume led. I think the margin, if you look at the 29 basis points, we've already achieved kind of a step change in a rate-cutting cycle. There'll probably be some reduction in margin from the current levels, mainly off the back of growth in the denominator to numbing lending assets. The group has planned there. And if you think that most of RMBs call it distribution strategies in the base you should see growth from their portfolio, which is slightly lower margin than the average of the group, but it will be led by both deposit growth and advances growth predominantly from that perspective. The last point to make because some of the margin will annualize in -- from this year. The growth that you've seen in the second half of the year will annualize in as well through that point. Lastly, the cost levers. I mean, I think in the variable cost base that we have, there's still a lot of room for us to improve, and we are investing quite a bit in use cases around AI initiatives that can free up some of the capacity there -- and some of those are actually before you get to people related, they're actually more professional fees and other costs that we incur. So that kind of would be a tactical immediate lever. And then on the structural side, -- there's work to be done around that new position Mary put forward around the technology enterprise-wide activity and the business services area as well. .

Yes. So I think, in short, I would just say broad-based, I think across the group, we need to make sure that we are efficient, and I think there is a proper focus on that.