JSE:FSR

Stock Analysis Report

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Executive Summary

FirstRand Limited, together with its subsidiaries, provides banking, transactional, lending, insurance, and investment products and services to retail, commercial, corporate, and public sector customers primarily in South Africa, rest of Africa, and the United Kingdom.


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has FirstRand's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FSR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

10.5%

FSR

9.6%

ZA Diversified Financial

3.9%

ZA Market


1 Year Return

-31.3%

FSR

-29.8%

ZA Diversified Financial

-19.8%

ZA Market

Return vs Industry: FSR exceeded the ZA Diversified Financial industry which returned -35% over the past year.

Return vs Market: FSR underperformed the ZA Market which returned -22.1% over the past year.


Shareholder returns

FSRIndustryMarket
7 Day10.5%9.6%3.9%
30 Day12.4%11.6%7.1%
90 Day-14.9%-14.2%-3.5%
1 Year-27.0%-31.3%-26.2%-29.8%-8.3%-19.8%
3 Year10.8%-4.7%6.5%-7.1%9.1%-11.8%
5 Year9.1%-14.8%8.2%-14.1%15.3%-13.8%

Price Volatility Vs. Market

How volatile is FirstRand's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is FirstRand undervalued compared to its fair value and its price relative to the market?

8.87x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FSR (ZAR45.01) is trading above our estimate of fair value (ZAR27.81)

Significantly Below Fair Value: FSR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FSR is poor value based on its PE Ratio (8.9x) compared to the Diversified Financial industry average (8.5x).

PE vs Market: FSR is poor value based on its PE Ratio (8.9x) compared to the ZA market (8.3x).


Price to Earnings Growth Ratio

PEG Ratio: FSR is poor value based on its PEG Ratio (5.8x)


Price to Book Ratio

PB vs Industry: FSR is overvalued based on its PB Ratio (1.8x) compared to the ZA Diversified Financial industry average (0.9x).


Next Steps

Future Growth

How is FirstRand forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

1.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FSR's forecast earnings growth (1.5% per year) is below the savings rate (9.5%).

Earnings vs Market: FSR's earnings (1.5% per year) are forecast to grow slower than the ZA market (19.8% per year).

High Growth Earnings: FSR's earnings are forecast to grow, but not significantly.

Revenue vs Market: FSR's revenue (6.9% per year) is forecast to grow slower than the ZA market (8.5% per year).

High Growth Revenue: FSR's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FSR's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has FirstRand performed over the past 5 years?

8.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FSR has a high level of non-cash earnings.

Growing Profit Margin: FSR's current net profit margins (29.9%) are lower than last year (32.1%).


Past Earnings Growth Analysis

Earnings Trend: FSR's earnings have grown by 8.1% per year over the past 5 years.

Accelerating Growth: FSR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FSR had negative earnings growth (-3.6%) over the past year, making it difficult to compare to the Diversified Financial industry average (16.1%).


Return on Equity

High ROE: FSR's Return on Equity (20.2%) is considered high.


Next Steps

Financial Health

How is FirstRand's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: FSR's Assets to Equity ratio (11.4x) is moderate.

Allowance for Bad Loans: FSR has a low allowance for bad loans (79%).

Low Risk Liabilities: 92% of FSR's liabilities are made up of primarily low risk sources of funding.

Loan Level: FSR has an appropriate level of Loans to Assets ratio (71%).

Low Risk Deposits: FSR's Loans to Deposits ratio (85%) is appropriate.

Level of Bad Loans: FSR has a high level of bad loans (3.6%).


Next Steps

Dividend

What is FirstRand's current dividend yield, its reliability and sustainability?

6.47%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FSR's dividend (6.47%) is higher than the bottom 25% of dividend payers in the ZA market (4.37%).

High Dividend: FSR's dividend (6.47%) is low compared to the top 25% of dividend payers in the ZA market (11.99%).


Stability and Growth of Payments

Stable Dividend: FSR's dividends per share have been stable in the past 10 years.

Growing Dividend: FSR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.7%), FSR's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FSR's dividends in 3 years are forecast to be covered by earnings (54.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.6yrs

Average management tenure


CEO

Alan Pullinger (54yo)

2.17yrs

Tenure

R49,765,000

Compensation

Mr. Alan Patrick Pullinger serves as a Non-Executive Director at Aldermore Bank Plc since March 14, 2018. Mr. Alan Patrick Pullinger, MCom, CA(SA), CFA, has been an Executive Director at FirstRand EMA Hold ...


CEO Compensation Analysis

Compensation vs Market: Alan's total compensation ($USD2.94M) is about average for companies of similar size in the ZA market ($USD2.91M).

Compensation vs Earnings: Alan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alan Pullinger
CEO & Executive Director2.17yrsR49.77m0.087% ZAR213.1m
Hetash Kellan
CFO, Executive Financial Director & Director6.42yrsR29.72m0.028% ZAR67.7m
Mary Vilakazi
COO & Executive Director1.92yrsR25.00mno data
Jacques Celliers
Chief Executive Officer of FNB6.67yrsR36.73m0.0059% ZAR14.6m
James Formby
Chief Executive Officer of Rand Merchant Bank4.75yrsR36.16m0.021% ZAR51.9m
Chris de Kock
Chief Executive Officer of WesBank6.67yrsR22.62m0.015% ZAR36.6m
Phillip Monks
Chief Executive Officer of Aldermoreno dataR2.02mno data
Yatin Narsai
Chief Information Officer and Chief Executive Officer of FNB Smart Solutionsno datano datano data
Sam Moss
Director of Investor Relationsno datano datano data
Jenitha John
Chief Audit Executiveno datano datano data

5.6yrs

Average Tenure

48yo

Average Age

Experienced Management: FSR's management team is seasoned and experienced (5.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alan Pullinger
CEO & Executive Director2.17yrsR49.77m0.087% ZAR213.1m
Hetash Kellan
CFO, Executive Financial Director & Director6.42yrsR29.72m0.028% ZAR67.7m
Mary Vilakazi
COO & Executive Director1.92yrsR25.00mno data
Zelda Roscherr
Independent Non-Executive Director0.17yrno datano data
William Jardine
Independent Non-Executive Chairman2.17yrsR6.58m0.0041% ZAR10.2m
Johan Burger
Non-Executive Director11.42yrsR12.09m0.11% ZAR281.2m
Amanda Nzimande
Independent Non-Executive Director12.33yrsR1.29mno data
Mary Bomela
Independent Non-Executive Director8.75yrsR1.08mno data
Grant Gelink
Independent Non-Executive Director7.42yrsR4.15mno data
Russell Loubser
Independent Non-Executive Director5.75yrsR4.79mno data

6.1yrs

Average Tenure

53yo

Average Age

Experienced Board: FSR's board of directors are considered experienced (6.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

FirstRand Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FirstRand Limited
  • Ticker: FSR
  • Exchange: JSE
  • Founded: 1998
  • Industry: Other Diversified Financial Services
  • Sector: Diversified Financials
  • Market Cap: R245.696b
  • Shares outstanding: 5.61b
  • Website: https://www.firstrand.co.za

Number of Employees


Location

  • FirstRand Limited
  • 4 Merchant Place
  • Corner Fredman Drive and Rivonia Road
  • Sandton
  • Gauteng
  • 2196
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FSTNMSE (Namibian Stock Exchange)YesOrdinary SharesNAZARJan 1992
FSRJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJan 1992
FAND.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
FSRADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
FAND.YOTCPK (Pink Sheets LLC)UNSPON ADRUSUSDJan 2009

Biography

FirstRand Limited, together with its subsidiaries, provides banking, transactional, lending, insurance, and investment products and services to retail, commercial, corporate, and public sector customers primarily in South Africa, rest of Africa, and the United Kingdom. It offers personal loans and short-term insurance; asset and invoice finance, as well as SME commercial, residential, and buy-to-let mortgages; and vehicle finance, installment credit and fleet management, and corporate and investment banking services. The company also provides asset management, as well as vehicle-related insurance services. FirstRand Limited was founded in 1998 and is based in Sandton, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/04 18:57
End of Day Share Price2020/06/03 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.