FirstRand : annual integrated report 2021

2021

annual integrated report

Owner-manager philosophy Innovation Entrepreneurship Franchise value

about this report

This integrated report describes the operational and financial performance and activities of FirstRand Limited (FirstRand or the group) for the year ended 30 June 2021.

The group continues to present both new and existing content in an accessible and diagrammatical style.

OF PARTICULAR NOTE:

In the CEO's report, there is a detailed unpack of the group's strategy across jurisdictions. There is also an explanation of its platform enablement journey, including an example of a customer ecosystem.

Infographics on pages 08 to 11 demonstrate how the operations of the group positively impact a broad range of stakeholders.

The commentary and financial results in the chairman's, CEO's and CFO's reports, and the operational reviews are based on the normalised results of the group. The normalised results have been derived from the IFRS financial results. A detailed description of the differences between normalised and IFRS results and detailed reconciliation between normalised and IFRS results are provided on pages 178 to 183.

1966/010753/06. Certain entities within the FirstRand group are authorised financial services and credit providers. This report is available on the group's website: www.firstrand.co.za/investors/annual-reporting/

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contents

FirstRand group

About the group	03
Integrated highlights	04
FirstRand's integrated reporting framework	06
Measuring social impact	08
Chairman's report	12
CEO's report	18
CFO's report	28

Review of operations

FNB	48
RMB	54
WesBank	58
Aldermore	61
Simplified group structure	63
Five-year review - normalised	64

Corporate governance

Governance outcomes	70
Ethical foundation and culture	71
Governance structure	72
Board of directors	78
Board committees	87
-	Large exposures committee	87
-	Directors' affairs and governance	89
	committee
-	Risk, capital management and	91
	compliance committee
-	Information technology risk and	94
	governance committee
-	Remuneration committee	97
-	Audit committee	105
-	Social, ethics and transformation	111
	committee
Responsible corporate citizenship	115
Stakeholder engagement	117
Independent assurance report on selected	118
non-financial information to the directors
of FirstRand Limited

FirstRand annual integrated report 2021 01

FirstRand group summary consolidated financial statements

Directors' responsibility statement and	123
approval of the summary consolidated
financial statements
Independent auditors' report on the summary	124
consolidated financial statements
Company secretary's certification	125
Summary consolidated financial statements	126
Selected notes to the summary consolidated	135
financial statements

Definitions, abbreviations and	169
supplementary information
Shareholders' information
Analysis of ordinary shareholders	187
Analysis of B preference shareholders	188
Performance on the JSE	188
Company information	189
Listed financial instruments of the group	190
Notice of annual general meeting	193

02 FIRSTRAND GROUP

integrated reporting suite

ANNUAL INTEGRATED REPORT

Describes the operational and financial performance and activities of the group.

It includes the chairman's, CEO's and CFO's reports, operational reviews, King IV corporate governance disclosures, group summary consolidated statements and notice of the annual general meeting.

https://www.firstrand.co.za/investors/annual-reporting/

ANNUAL FINANCIAL STATEMENTS

• FirstRand group audited consolidated annual financial statements
• FirstRand Limited company audited financial statements https://www.firstrand.co.za/investors/annual-reporting/

ANALYSIS OF FINANCIAL RESULTS AND RESULTS PRESENTATION

Cover the audited summary consolidated financial results of the group based on International Financial Reporting Standards (IFRS) and provide an in-depth analysis of the group's financial results, presented on a normalised basis as the group believes this most accurately reflects its economic performance. The analysis of financial results and results presentation are provided for interim and year-end results.

https://www.firstrand.co.za/investors/financial-results/

BASEL PILLAR 3 DISCLOSURE

In accordance with the Basel Committee on Banking Supervision (BCBS) Pillar 3 framework and Regulation 43 of the amended Regulations relating to Banks, the group is required to publish standardised disclosure templates that provide users with key quantitative and qualitative information that is comparable and consistent. Reports are provided on a biannual basis.

https://www.firstrand.co.za/investors/basel-pillar-3-disclosure/

MATERIAL RISK FACTORS

In terms of the JSE Listings Requirements, FirstRand is required to disclose risk factors in terms of paragraph 7.F.7 (description of material risks which are specific to the issuer, its industry and/or its securities).

https://www.firstrand.co.za/investors/annual-reporting/

REPORT TO SOCIETY

Provides deeper insight into the social impact of the group's operational and financial performance.

https://www.firstrand.co.za/society/firstrand-contract-with-society/

REMUNERATION REPORT

The remuneration report details FirstRand's remuneration philosophy and policy, and how they were implemented in the current year. Disclosures are aligned to the requirements of section 64C of the Banks Act, the FSB's Principles for Sound Compensation Practices and its Implementation Standards, the BCBS's Pillar 3 disclosure requirements standard - updated framework (December 2018) and Directive 1/2019 issued by the Prudential Authority, and the recommended practices of King IV, where appropriate.

https://www.firstrand.co.za/media/investors/annual-reporting/firstrand-remuneration-report-2021.pdf

TCFD REPORT

The Task Force on Climate-related Financial Disclosures (TCFD) was constituted by the Financial Stability Board (FSB) in response to the Paris Agreement. Through recommendations for clear, comparable and consistent information, it promotes transparent disclosure of climate risks and opportunities. FirstRand is a TCFD signatory, and this report represents the group's first TCFD disclosure. This disclosure will enable stakeholders to understand and track FirstRand's progress against its climate roadmap and approach to climate risks and opportunities, as well as short-, medium- and long-term targets.

FirstRand annual integrated report 2021 03

	about
	the
	group
PURPOSE	FirstRand commits to building a future of shared
	prosperity through enriching the lives of its
	customers, employees and the societies it serves.
	This is the foundation to a sustainable future and
	will preserve the group's enduring promise to
	create superior returns for shareholders.
PORTFOLIO	FirstRand is a portfolio of integrated financial
	services businesses operating in South Africa,
	certain markets in sub-Saharan Africa and the UK.
	Many of these businesses are leaders in their
	respective segments and markets, and offer a
	broad range of transactional, lending, investment
	and insurance products and services.
STRATEGY	The group's strategy in its domestic market is to
	deliver platform-based integrated financial services
	to customers. In the rest of Africa, the group is
	focused on growing its presence in certain key
	markets where it believes it can build competitive
	advantage and scale over time. The UK operations
	present an opportunity to build a more valuable
	business in a large market with lower risk.

TRACK RECORD

Consistent execution on strategy and a disciplined approach to allocating scarce financial resources have delivered a long track record of superior economic profits, returns and dividends to shareholders.