RMB - Rand Merchant Bank’s Post

Transcript

Emrie, give us your first impressions about RMB's results. We have delivered a set of results in 2024 that I'm really proud of, in particular in the context of the challenging markets that we operate in. These results reflect our strategy in action as we execute on our fit for purpose, client centric model in building an integrated, diversified and scalable business. In the current year, we have seen very pleasing growth in advances, and this growth was very deliberate in spaces such as large corporates and infrastructure and most notably, renewable energy. I'm very comfortable with the strength of our credit portfolio and also the growth that we've seen in our capital light activities, in particular our operational and investment deposit base, and that is really a testament of very strong client acquisitions in the current year. Both of these have resulted in strong NII growth and has also resulted in very pleasing increase in our knowledge base fees from strong origination efforts by our teams, as well as advisory mandates. So we've also very strategically invested in our platforms and capabilities to enhance our client and employee experience, which led to the increase in operational expenditure. And there are two differentiators for me. The first one is our Private equity business, where we've seen strong growth in annuity revenue thanks to continued investments at all, as well as reflecting the strength of the underlying portfolio and then also some solid realisations. Other differentiator is our client led principal investment business. Also in that business, strong annuity growth and strong realisations that resulted in an uplift in our return on assets and our return on equity. Our broader Africa portfolio, in line with our strategy, really delivered a stellar performance with significant growth in most of our businesses. For me, these results really is a reflection on the quality of people we have in RMB, and how deeply invested they are in the success of our business. Please share some of our headline figures. Emrie, we achieved PBT growth of 9% this year, and I think the core art is really the fantastic performance from the broader Africa portfolio. This translated into ROE of 20.3%, which I think is a solid performance for the year and normalised earnings growth of 7%. Let's take a closer look at the performance of our individual businesses. Can you provide us a bit of an overview? Of course. I think the call out was really for IBD. They had a fantastic year with PBT growing 13%. And I think the key takeaway there is really the growth in non-interest revenue of 37%. The increased activity and advances growth of 12% translated into knowledge base fee income growth of 31% in the current financial year. Really strong coming through on advisory mandate, structuring and arranging fees. And I think that was an excellent performance for that business. I mean, as you mentioned, that was also kind of underpinned further by a strong performance from PI. And I think they what is very pleasing is the income growth of 13% for the year. If we then turn to Treasury and Trade Solutions, PBT is up 6%. There, revenue growth of 8% was underpinned really through strong non-interest revenue growth of 13%. I think pleasingly, we saw advances growth close to double digits. But you mentioned it. I think the standout there is the growth in operational deposits of 11% during the course of the year and also margin expansion to some extent underpinned through the elevated ride cycle that we saw in broader Africa during the course of the year. Turning to Global Markets. PBT is down 2% net business this year. I think we need to unpack the kind of moving parts. The revenue went up 8%, a little bit of a mixed performance from the various underlying kind of business lines. On the slightly negative side, cost growth sitting at 17% this year. But I do think we need to unpack that. It really reflects high IT spend and building out of capabilities in that business in the current year. You mentioned Private equity. So let me just add one more thing. The annuity income growth was 15% this year. And I think looking into the future, a lot of investment going into their business, there's a lot of traction and future kind of realisations that we can hopefully get out of that business. And then finally, Ashburton pleasing growth of 12% in fee income on the back of growth in asset management in a very difficult market in South Africa this year. You mentioned in your headline overview, broader Africa, can you provide a bit more detail on the performance of that part of our business? Of course. So first thing to mention broader Africa now represents 33% of RMB's PBT. And just in the context of our 2028 goal of getting that to 40%. So I think excellent performance from the business, the increased PBT 16% in the current financial year. Again, you need to kind of position that in the context of significant currency devaluation in Nigeria and in Zambia. So in constant currency terms, the business is actually up 30% in the current financial year, which is fantastic. What are some of the drivers net interest income up 17% in the current financial year. It reflects good growth and advances, very good growth in operational deposits, double digit growth. And again, as I mentioned, margin expansion with margins going up 63 basis points. And that is really as a result of the elevated rate cycle that's played out kind of in the margins in the current financial year. So all in all, the very, very solid performance of that franchise, Emrie looking forward into the next financial year. What are your views about where you think the business can grow, and how can we assist our clients to thrive? Jaco, the recent. BER results showed improved confidence in in South Africa following the establishment of the Government of National Unity. It's really positive to me that they've got an agreed reform agenda that shows the urgency to address the structural issues to unlock growth in South Africa. I think in many of our other markets, we are also seeing some some green shoots. And it's always, you know, when we visit some of our jurisdictions outside of of broader Africa, then the UK, the US and China. We really just continuously see this interest in Africa, which I think overall bodes well for our future growth aspirations. Our purpose at RMB is to empower our people and our clients to be exceptional together for all to thrive. We thrive on human connection and innovation, to provide our clients with the right solutions to meet their need so that they can deliver on their strategies and overall, so that we can contribute or have a positive impact to the economic, social and financial landscape of the economies that we operate in. We remain committed to support our clients and the regions that we operate in to transition to low carbon economies. In financial year 2024, we actually far exceeded the goal we set for ourselves by delivering R90 billion of facilitation of sustainable finance transactions. And I think that we're excited about the future in this space. We are seeing lots of opportunities in our identified strategic themes and I am excited about this momentum that we've gained in financial year 2024 and how we can build on that in partnering with our clients and the broader FirstRand Group to deliver on our clients' needs and our performance to our shareholders.