(Bloomberg) -- FirstRand Ltd., Africa’s biggest bank by market value, reported its slowest profit growth in four years after increasing provisions to account for an on-going probe at its UK vehicle-finance unit.
Net income climbed 4% to 38 billion rand ($2.1 billion) in the 12 months through June from 36.6 billion rand a year earlier, the Johannesburg-based lender said in a filing on Thursday. The bank announced a dividend of 4.15 rand a share. That compares with the 4.01 rand a share forecast by analysts in a Bloomberg survey.
FirstRand set aside 3.3 billion rand amid a UK probe into its vehicle-financing practices at its MotoNovo unit. The UK’s Financial Conduct Authority is reviewing historical motor finance commission arrangements to establish whether the loans were sold in a way that treated customers unfairly. The higher impairment increased the lender’s costs in the year.
Rival Investec Plc was also caught up in the probe, and said in May that it set aside £30 million to redress the issue.
FirstRand’s shares have risen 16.5% this year, underperforming an 18% gain in the seven-member FTSE/JSE Banks Index.
The earnings release is the first since Mary Vilakazi took over as chief executive officer in April. She replaced Alan Pullinger, who retired after more than 26 years at the company, and six years of serving as group CEO.
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