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FirstRand CEO calls out SA government on continued Russian support

FirstRand CEO calls out SA government on continued Russian support
FirstRand chief executive Alan Pullinger. (Photo: Freddy Mavunda / Business Day)

Alan Pullinger, FirstRand’s CEO, says South Africa’s open support for Russia ‘could have extremely negative consequences for the country, which benefits far more from trade with and investment from the USA, UK and Europe than from Russia’.

FirstRand’s chief executive, Alan Pullinger, was harshly critical of the government when reviewing the outlook for the near to medium-term future. “The FATF [Financial Action Task Force] greylisting is unfortunate but not unexpected and we believe it is manageable.

“The main headwinds are increased compliance and transaction costs, and perhaps lower capital flows to the country. National Treasury, the Financial Sector Conduct Authority and the South African Reserve Bank put in a concerted effort to avoid this outcome, but some of the necessary deliverables were not within their control. As a sector, we will continue to work hard in partnership with them to get off the grey list as soon as possible.”

He adds that the geopolitical risk facing South Africa and the banking sector is much more worrying, referring to the government’s open support for Russia, which is increasingly being called out by major trading partners. 

“This could have extremely negative consequences for the country, which benefits far more from trade with and investment from the USA, UK and Europe than from Russia. In addition, the South African banking sector, and this includes our central bank, crucially relies on access to the US dollar, global clearing and settlement, which is a privilege and can be revoked at any time. For all of these reasons, FirstRand does not share government’s enthusiasm for Russia,” he commented in no uncertain terms.


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The financial services giant posted a 15% uptick in normalised earnings to R18-billion for the six months to December 2022. This strong earnings print, supported by capital optimisation, resulted in a normalised return on equity (ROE) of 21.8%, which is at the top end of the corporate’s target range of 18% to 22%. In addition, the group produced R6.2-billion of economic profit, which is now above pre-pandemic levels. The group’s credit performance was better than anticipated, with almost all portfolios posting decreasing non-performing loans.

Pullinger said FirstRand’s results reflect the strong operational performances from the group’s customer-facing businesses — FNB, WesBank, RMB and Aldermore — and “demonstrate the size and quality of FirstRand’s transactional and deposit franchises, continued momentum in lending, and a better credit outcome than expected”.

Retail lending in secured products, such as residential mortgages and vehicle and asset finance, continues to be focused on low- to medium-risk customers. In the commercial segment, lending focused on those sectors showing above-cycle growth and which are expected to perform well even in a high inflationary and interest rate environment.

Growth in corporate advances was strong, with new business also leaning towards lower-volatility sectors and better-rated counterparties. Total group non-interest revenue increased by 11%, supported by a 10% growth in fee and commission income, a 5% growth in trading income and a hefty 31% increase in insurance income.

Normalised profit before tax for the client-facing divisions was:

  • FNB showed a growth of 16% in normalised profit before tax (PBT), and ROE improved to 43%.
  • WesBank’s normalised PBT was up 4% and its ROE improved to 21%.
  • RMB delivered 25% growth in normalised PBT, and its ROE improved to 22.4%.
  • Aldermore and MotoNovo in the UK delivered 11% growth in normalised PBT and an ROE of 12% (in sterling). DM/BM
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  • Peter Slingsby says:

    As long as the Russian oligarchs continue to fund the ANC this government will continue to grovel pathetically at Putin’s feet. What a sad, unpatriotic, useless lot they are.

    • D'Esprit Dan says:

      ‘Party before the People’ should surely be the honest ANC slogan from now on. ‘A Better Life for All’ was always a sick, depraved, Orwellian joke.

  • Rob Glenister says:

    At last, a captain of industry with some gumption.

  • D'Esprit Dan says:

    He’s 100% correct, of course, but our puerile politicians still think they’re in the 70s fighting against ‘The West’ and ‘Global Capital’ and that somehow Russia and the Soviet Union are one and the same – in Putin’s world view they certainly are, not so for the countries that used ot under the yoke of Soviet Russia (there was nothing ‘union’ about it). No doubt some outraged lackey will tell him to keep out of politics, displaying, as ever, complete ignorance of the linkages between politics and international business in our interconnected global environment. And if business is to stay out of politics, perhaps the mindless luddites in Luthuli House and elsewhere could do us all a favour and stay out of business?

  • Andre ZAAIMAN says:

    South Africa is a member of BRICS. South Africa maintains a Non-Aligned position on the Great Power conflict currently playing itself out in Ukraine. The CEO is both ignorant and ill-informed about world politics and the pro-peace position of sane Governments. Perhaps he should read the current issue of The Spectator: a conservative British political magazine (the oldest of its sort in the West and once edited by Boris JOHNSON. The title of its lead page is: “Is Putin winning?
    The world order is changing in his favour”. Read the recently released Chinese Position Paper – US Hegemony and it’s Perils: the world has shifted to a multipolar system…the CEO is dangerously stuck in his head and in wishful Eurocentric thinking…wait for the strategic surprise!

    • Peter Oosthuizen says:

      Eurocentric? The ANC fat cats don’t reject , Euros, Italian cars, Swiss banks or watches, Scottish single malts in favour of Roubles, Zils, Russian banks, Vostok watches or Stolichnaya.

    • James Francis says:

      I know dagga is semi-legal in SA, but maybe you need to cut back.

    • Rory Macnamara says:

      Non Aligned means exactly what it says. SA has shown themself to be very aligned with Russia with all the antics of late.

    • D'Esprit Dan says:

      Read Kate Dent’s stunning dissection of South Africa’s abysmal, anti-human rights voting record at the UN from DM in February last year, which highlights just how far down the rabbit hole of lunatic fringe we’ve gone in the last 20 years (and simultaneously up the posteriors of some of the worst regimes in the world) and then come back and admit that it’s you who’s knowledge of global affairs is lacking.

      You also miss the point: Pullinger was talking about which countries we trade with most and that invest in our economy – not who’s winning a brutal war in Eastern Europe or whether global power is shifting to a more multipolar system: what’s the point of that if it doesn’t result in investment and job creation? Show me how many sustainable jobs Russia and China have created in South Africa compared to the USA (600+ companies INVESTED here), EU and UK. It’ll be a risible, piffling amount.

    • Johan Buys says:

      Andre, in a bipolar world, the poles are normally two powerful balancing forces. Russia’s economy is the size of Spain’s economy and as we have now learnt, any Nato country can on its own flatten putin’s conventional armed forced in two weeks. The only “bipolar” putin will see is a diagnosis by a head doctor.

      Contrary to the spin, it is NOT a question of the “west” versus putin. Unless you count most of south america, central america, africa, the middle east and asia as the West. It is basically only china, india, south africa, israel, north korea and putin’s satellite countries that did NOT call for immediate withdrawal from Ukraine.

    • Abri Vermeulen says:

      Here silly me thought the UN charter aims to move the world out of 19th century mentality of ‘multipolar’ and ‘Great Powers’ that wants colonies and empires – and scramble for continents. Obviously bank CEOs are appointed for being stuck in their own heads and ‘eurocentric’ thinking, not on actual financial skills or trade value knowledge

  • Mike Waghorn says:

    Shame. He will shortly be forced out of his job for being correct and we will lose another Captain of Industry.

    • Greg King King says:

      Watch this space! Under the State of Disaster – where procurement formalities can be side stepped: Russia and/or China are going to be awarded contracts to build (coal fired) new power generating plants in record time and on the cheap!
      Our beauts at Loothuli House will say this was why looked the other way with Russia’s invasion of Crimea.

  • Jane Crankshaw says:

    We need more Captains of Industry calling out the ANC – the time has come!
    Reading the stats on Donations to the Political Parties, it’s shocking to see how many Companies hedge their bets by contributing to the ANC – supporting the very people who steal from the poor, and the taxpayers that fund this country. Naspers and Harmony were named in the article and they should be ashamed of themselves. More funding to the right party would enable them to do what Gift of the Givers does – be there for the people who need you, and give taxpayers some value for their contributions.

    • Lisbeth Scalabrini says:

      They take care of their own interests. If another party was governing, the donations would go to them. Ethics are not good for business 😉

  • Jon Quirk says:

    Wow! A bank CEO finally waking up and actually saying something about the way the ANC is destroying our country. Mr Rip van Winkle Pullinger better now go and have a lie down and pour yourself a good stiff one after finally waking up and saying something after 25 years!

    I wonder where your next burst of activity might take you – perhaps to a serious increase in directors fees I shouldn’t wonder …

  • MICHAEL POWER says:

    Technically South Africa is “neutral” in the Russia-Ukraine conflict as evidenced by all its UN votes. Other BRICS members India and China have likewise always abstained in UN votes; Brazil however has voted against Russia (I’m with Brazil!) . A big hullabaloo is going to happen late August if President Putin attends the BRICS summit in Durban (likely). Important not to forget our lead trade partner – both for imports and exports – is of course China (by far, but not mentioned.)

    • James Francis says:

      If our economy was thriving thanks to those trade partnerships, then maybe this would be a valid consideration. But that’s not the case. The Russians know the ANC is corrupt and China knows the ANC is weak. That’s the basis of our relationships with them. Political neutrality is an oxymoron.

    • D'Esprit Dan says:

      We import from China what we used to manufacture before blackouts, spiraling utility and land costs, wage demands (whilst striking for about a month a year) and imported input costs have spiraled out of control under the ANC, rendering our factories increasingly uncompetitive. We export largely raw material to China – iron, coal and other minerals, as well as some (and growing) volumes of agricultural goods.

      If you remove products with no value added from our exports, then the figures to China drop from US$13.5bn in 2021 (latest consolidated) to just US$1.15bn, which will still include a good deal of basic stuff. Our exports to Botswana for the same period amounted to US$4.36bn, dropping to US$3.77bn when the same basket is excluded. So our exports of value-added goods to China is roughly 30% of what it is to Botswana. On a per capita basis (just for fun) our exports to Botswana are around US$1,509 a year to them and less than US$1 to China! Our factories are not being kept open by China – they’re being kept open by our African neighbours. And also the USA and EU (over 60% of automotive production in SA goes to the evil West). Trade and China is a massive red herring, from our perspective.

  • Graham Howard says:

    Well done Alan Pullinger for having the courage to speak up to this decrepid regime and its ridiculous policies that hurt every South African every day of our lives. Hopefully, this will be the start of the South African business leaders standing up and speaking out together about the ANC policies which do nothing to build this country, only to support their ideologies and false promises. Too quiet for too long.

  • Peter Oosthuizen says:

    When did the ANC ever put the country’s interests ahead of their own?

    • Graham Jacobs says:

      I don’t even think it’s a case of the ANC putting its interests ahead of its own. It’s more a case of individuals within the ANC putting their interests before anything else. That is precisely why there is so much infighting within that once highly respected organisation. And all of this at the expense of the poorest in our country. Think how many mouths could have been fed with the money used to purchase the 15 year old whisky in which some of these selfish degenerates wash their hands. Makes me utterly sick.

  • Colin Amm says:

    Very well said ! We need many more captains of industry to stop being politically correct, grow some balls and follow his example.

  • James Francis says:

    *Waiting for the predictable and irrational ANC backlash*

  • Graham Jacobs says:

    One cannot but wonder who are the beneficiaries of what I can only imagine are significant financial ‘incentives’ to individuals within the ‘ruling’ party.

  • Rory Macnamara says:

    well done Sir. where are these so called bodies representing industry, BUSA, BBC, and the bunch that have as members these large corporates and racially formed business bodies who claim to represent commerce and industry.
    OK here is the answer, we hear it so many times! their response is we deal directly with government and it does not make sense to annoy government with public remarks. these corporates forget, like government, who pays their fat cat salaries, US THE PUBLIC! we say annoy government, stop it with these silly meeting after meeting when nothing happens. one may find the public taking on the corporates buy boycotting both government and corporates.

  • Isis Limor says:

    The SA economy may benefit far more from Western trading partners… but the ANC derives far more economic benefit from Russia. Party first as always.

  • Rob Wilson says:

    Well done on coming out from behind the ivory tower mentality of so many captains of industry. They all need to come out and address this, if for no other reason that someone has to provide leadership. The ANC is morally bankrupt and is without any leadership at all.

  • Trevor Pope says:

    Yet another reason to vote out the ANC.

  • Cunningham Ngcukana says:

    The permanent Russian stooges in the ANC administration have no grasp of the will of the Ukrainian people to fight and drive out the Russian barbarians of the 21st Century. The second thing is the failure to grasp the will of the world led by the US, EU, UK, Canada and other European countries never to allow the Russian thugs to get the Russians out of Ukraine and to ensure that what Putin has done will not stand. The measures put in place are not only to support Ukraine in its military effort and humanitarian aid but through sanctions in what the US has put in no uncertain term against the Russian thugs, countries, entities and individuals who consort, aid and abet the Russian aggression against Ukraine. This includes exclusion from the international payments system that Russia has been take out of just like Iran. The conduct of the ANC regime is not only a risk to banks but the economy of the country. If South Africa is removed by the actions of thugs who have taken the country to the stone age through blackouts, destruction of the rail system, water and sanitation infrastructure, road transport infrastructure, criminal justice system and any prospects of economic growth they would be completely adding another of their destructive instincts , the destruction of the economy. This country will not be able to withstand any western sanctions. There is nothing called non-alignment
    in the violation of international law and the UN Charter by Russian barbarism.

  • Petrus Kleinhans says:

    Being part of BRICS (which is a baseless association anyway), has not meant that Brazil had to participate in military exercises with Russia and China. By doing so in the context of the anniversary of the outbreak of war against Europe and the USA fought on Ukrainian soil, South Africa has given up on being non-aligned. And it is frankly an odious brain fart of the highest order.

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