Separately listed RMBH (R39,7bn market capitalisation at end December 2006) has interests in:-
banking and insurance giant FirstRand (33%);
personal lines insurer OUTsurance (62%);
specialist insurer RMB Structured Insurance (80%); and
short-term insurance broker Glenrand M.I.B (16%).
FINANCIAL HIGHLIGHTS
RMBHs key financial highlights for the six months ended 31 December 2006 are:-
Attributable earnings per share + 30% to 157,7c (2005 : 121,6c)
Normalised earnings per share + 22% to 155,1c (2005 : 126,7c)
Interim dividend per share + 22% to 61,5c (2005 : 50,5c)
The make-up of RMBH's normalised earnings for the six months was as follows:
RMBH Chairman GT Ferreira commented that, "This economic environment particularly suited FirstRand, which proved to be a power house and provided the lion's share of our normalised earnings".
Ferreira highlights that at FirstRand the star performers were RMB and FNB, which grew normalised earnings by 75% and 26% respectively.
At RMB pre-tax profits exceeded R2,0 billion, with all the divisions performing well. Their excellent performance underscored how well positioned RMB was to benefit from the favourable conditions the market place presented. RMB maintained its strong client franchise through the provision of innovative products in the local market and were very successful in applying their trading models and intellectual capital in international markets where the opportunities presented themselves.
FNB grew pre-tax profits by 24% to R3,1 billion by continuing to focus on its segment strategy. In particular, FNB HomeLoans and FNB Card were able to increase profitability on the back of solid new business volume growth.
By and large, where profitability was muted, it tended to be as a result of investment in new business and growth initiatives. This was particularly true in the case of Momentum and WesBank.
Of RMBHs directly held interests, OUTsurance continued to grow strongly, increasing net earned premium income by 27% to R1,3 billion for the six months. As short term insurance rates begin to harden, OUTsurance can be expected to benefit handsomely from its scientific and disciplined approach to underwriting.
RMBH increased its interim dividend by 22%, in line with the increase in normalised earnings.
OUTLOOK
Ferreira believes that the favourable economic conditions are likely to continue into the second half of the year. He is of the view that the existing strategies of the Group and diversified income streams generated from the underlying business units positions it to achieve the Groups stated objective of 10% real growth for the year to 30 June 2007.
He commented that, "Throughout our Group we have great franchises, run by great teams. The disciplined manner in which they have invested in future growth strategies should enable us to continue to produce excellent results".