FNB’s digital platforms show resilience amid COVID-19

Read time 3min 40sec
Jacques Celliers, FNB CEO.
Jacques Celliers, FNB CEO.

First National Bank’s (FNB’s) digital platforms have grown remarkably as the bank navigates the murky waters of the COVID-19 pandemic.

This morning, the big four bank announced its annual results for the financial year ending 30 June, saying its digital strategy paid off for customers.

Among the highlights of the results from a digital standpoint, FNB says its banking app volumes went up 28%, the eWallet transacting base was up 39%, while the eBucks earn value rose 9% to R2.2 billion.

In a statement, FNB says it acknowledges that the year has been very hard for many due to an economy that was already struggling before COVID-19, escalating health risks as well as financial difficulties for both consumers and businesses.

It is against this backdrop that the bank’s pre-tax profit declined 30%, mainly driven by a significant increase in credit impairments, says the bank.

However, it adds, the bank still delivered a respectable return on equity of 25.8% and a resilient operating performance, with pre-provision operating profit flat year-on-year.

ITWeb recently reported that South African banks are witnessing a sharp decline in customers visiting branches amid fears of the coronavirus.

However, the banks said they are witnessing a marked increase in digital interactions on their platforms.

Commenting on the results, FNB chief executive Jacques Celliers says: “We are grateful to all our customers for their ongoing support that is demonstrated through increased adoption of digital platforms which enabled FNB to produce a resilient performance in very difficult circumstances.

“Our momentum prior to lockdown was encouraging across all performance indicators and we are pleased to report accelerated adoption of our digital channels throughout the financial year. After the announcement of a national lockdown in March, we were agile enough to calibrate our operations to safely provide essential services in branches and Cashflow Relief on our platform.”

FNB also notes it achieved customer growth across both its premium and commercial segments, including upward migration of customers from its consumer segment, to maintain 8.23 million clients for the financial year.

In addition, it says, the number of customers who regularly transact via eWallet showed remarkable growth (39%) to reach 3.27 million with 29% of all withdrawals on FNB ATMs coming from eWallet users.

“This is reflective of FNB’s commitment to advancing financial inclusion. Furthermore, the value of eBucks earned by customers has increased by 9% to R2.2 billion, with an excellent 90% spend to earn ratio.”

The bank’s insurance business increased its annual premium equivalent by 7% and increased its share on wallet into the FNB base.

It points out there was also pleasing growth in underwritten life insurance policies, driven by growth from digital channels.

According to FNB, the total policies amount to four million and lives covered spans 6.3 million people. The wealth and investments business has grown assets under management by 8%, benefiting from improved net flows and investment performance.

Assets under advice saw net inflows of R4 billion for the period. Furthermore, the investment in platform distribution is assisting with client penetration, with good digital distribution of wills, online share trading and Horizon unit trusts, resulting in 13% growth in the account base, says the bank.

It adds that customers who use mobile offering FNB Connect were also awarded 1GB of free data, totalling half a million gigabytes awarded, to remain in touch with family and friends.

“The pandemic has reinvigorated our commitment to helping customers in every context and we are inspired to further accelerate our platform journey in the months ahead,” Celliers says.

“We are equally grateful to our frontline and other essential staff who continue to help customers beyond the call of duty. In support of the re-opening of the economy, our branches are now operating at full capacity. We are encouraged by evidence of green shoots in consumer and business economic activity, and we hope to see this accelerating even further to boost economic recovery,” he concludes.

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