The lender joins other South African banks in seeing an improved outlook as the nation recovers from an economic contraction of 7% last year, largely caused by lockdown measures to contain the coronavirus. Standard Bank Group Ltd. said last week it anticipates headline earnings per share will rise by at least 40% for the six months through June.
South Africa’s central bank sees a a rebound to 4.2% growth this year, and first-quarter data due Tuesday will probably show an expansion from the previous three months. That said, the economy is still likely to have contracted from the mostly pre-lockdown period a year earlier, while power-supply shortages continue to weigh on the recovery.
South Africa’s banking regulator has also relaxed guidance on capital preservation, altered to make sure the industry continued to lend during the worst of the pandemic. That’s helped South Africa’s big four banks issue dividend payments earlier this year.
FirstRand shares rose 0.6% by 10:25 a.m. in Johannesburg, extending the year’s gains to 10%.