Investors are cautiously optimistic about Firstrand's recovery toward R100 resistance, with discussion focusing on loan loss provisions stabilization and potential benefits from future interest rate cuts. The consensus is that the dividend yield looks attractive if rates decline, though concerns remain about net interest margin pressures and cash generation not yet returning to pre-cut dividend levels.
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I need to flag that the run to R100 feels more technical than fundamental. Half year numbers were solid enough on net interest margin, but net loan losses are creeping up across the retail book and that's the bit the market's choosing to ignore right now. Long term the diversified model still works, shame about the load-shedding drag on economic activity though.
FSR at 98c68 and the financials sector is still grinding through rate uncertainty. The dividend yield remains respectable but you're paying for stability rather than growth at these multiples.
r100 is real resistance but the net interest margin squeeze is the thing to watch here. wesbank's been solid through load-shedding cycles which most don't give enough credit for, and if the reserve bank finally cuts rates next year the loan book improves materially. strictly speaking we're not back to pre-cut dividend levels in terms of cash generation yet, so patience on the yield story.
Dividend yield looking decent at these levels, especially if rates start coming down.
Been holding FSR since the dividend cut and honestly the recovery into 98.85 looks solid given the net interest margin pressure across the sector. But I need to flag that if we're testing 100 again, we need to see the loan loss provisions stabilise, otherwise it's just short covering before the next earnings surprise.
FSR sitting at R96.18 with a dividend yield around 4.5% - at what point does the valuation become attractive enough to build a position, or is the ROE compression a red flag we shouldn't ignore?
FSR at R96.18 trades at a reasonable valuation relative to its earnings power and dividend yield, but the real question is whether the group can sustain loan growth and manage credit costs in a higher-for-longer rates environment. The structural tailwinds from inflation and rate
FSR sitting at R96.18 with that dividend yield still hovering around 3.5% while the rest of the market hunts for income. Balance sheet is fortress-grade but earnings growth has been pedestrian, so you're essentially paying for stability rather than expansion.
FSR at R96 trades on a reasonable 9.5x forward P/E against a dividend yield sitting around 5.2%, which isn't shabby for a large cap bank in this rate cycle. The real test is whether net interest margin holds firm if we see cuts sooner than expected, but the balance sheet remains
@pedant_pete that was your own post mate, you talking to yourself now?
Dividend yield is solid but strictly speaking you're buying into a maturity story. The real test is whether they can grow earnings faster than the economic headwinds, and NIM compression isn't helping that case. Wesbank's been the bright spot but vehicle finance cycles turn quick. Fair value around here if you're in for income, risky if you're betting on capital appreciation.
@sceptic_pieter fair points on NIM, but I need to flag the impairments narrative. Last set showed them actually improving, not creeping up.
FSR sitting at 95.87 and the dividend yield is still decent if you believe the NIM holds up, but I'm watching net interest margin closely because that's where the real story is. Loan impairments creeping up and the economic cycle turning, so margins say otherwise to all the "recovery" talk you hear. Bank valuations got hammered globally, we're not immune, but FirstRand's diversified business helps. Problem is the low single digit growth outlook and we're paying for history here, not the future.
@sceptic_pieter rmh's a different beast entirely, bit unfair to park them side by side on nims alone
@sceptic_pieter nah but rmh got property exposure that's looking dodgy, ngl. which is worse, consumer credit or that?
Ag man, 95.87 is fair value at best given where NIMs are heading. The dividend's nice but you're banking on rate cuts to fix the margin squeeze, and with load-shedding still hammering operational costs, I'm not convinced that's coming fast enough. RMH trades on similar yield but less exposure to the consumer credit side of things, which feels safer right now.
FSR closing at R95.87 is still a decent entry if you're thinking medium term, but the margin pressure from competition and load-shedding drag on NIM won't disappear overnight. Dividend yield's solid enough though, and they're diversified across retail, commercial and vehicle finance in a way that JNX or RMH aren't, which counts for something. I'd rather own it than chase rallies elsewhere in financials.
The dividend is real enough but you're buying a mature bank at peak multiples with load-shedding eating into commercial lending demand. NIM compression isn't going away and Wesbank's growth is bumping up against saturation in the vehicle finance market. FSR's a keeper for income but this isn't a value play at 95.87.
@thulangwenya74 ja, spot on with that one
Current R 100,46 — 50% of range
Fundamentals sourced from JSE disclosures. Updated quarterly.