JSE-listed FirstRand Limited expects its earnings for the year ended June 30, 2021 to increase by at least 20% as it sees continued growth in borrowings and stronger momentum in corporate activity, it said in a trading statement.

Th financial services provider on Friday said it expects its headline earnings per share (Heps) to increase from 480.5 cents to 576.6 cents and earnings per share (EPS) to rise from 476.9 cents to 572.2 cents.

“The credit cycle in South Africa is incrementally gaining impetus, particularly in the retail and commercial segments. Corporate activity is also showing stronger momentum, particularly in the last quarter,” FirstRand says in a statement.

“These trends have continued to support advances growth, resulting in healthy net interest income.”

Providing an update on its operation in the United Kingdom, the group reports that it has seen further growth in the vehicle asset finance business, as well as a growth in mortgages and asset finance.

“Activity levels in the domestic retail, commercial and corporate customer segments have increased, with fee and commission income in particular showing a higher growth trajectory. This, together with strong insurance premium growth and lower claims, is underpinning an improved non-interest revenue trend.

“Group credit impairments continue to reduce and non-performing loan (NPL) formation remains in line with expectations. Due to ongoing uncertainty, the group remains conservatively positioned with regard to its forward-looking provisions.”

Upon FirstRand releasing its earnings expectations for the full year, the market registered a positive reaction with the group’s share price rising by almost 4% during early morning trade.