Johannesburg - FirstRand completed the final leg of its merger yesterday
with the reorganisation of its banking interests under FirstRand Bank
Holdings, a single legal entity that will embrace the operations of First
National Bank Holdings (FNB) and Rand Merchant Bank (RMB).
Viv Bartlett, the chief executive of FNB, said: "We will operate under one
balance sheet but we want the individual FNB, RMB, Wesbank and Origin
brands to continue to grow under their own identities."
When Anglo American and RMB Holdings merged their financial services
interests in April last year to create FirstRand, the banking and insurance
interests were divided into two subgroups on regulatory grounds.
The FirstRand Insurance Group comprises Momentum Life, Southern Life and
Discovery Health. Yesterday``s announcement of the creation of FirstRand
Bank Holdings with effect from June 30 completes the division of interests.
The formal merger of FNB and RMB into a single legal entity signals the
elimination of the last cross-shareholding between the insurance and
banking interests, namely Southern Life``s stake in FNB.
"Southern Life``s remaining stake in FNB has been dividended up to FirstRand
(the old Momentum Life) and now sits in the FirstRand Insurance Group."
The fusion of the various elements of FNB and RMB ends the notion that
FNB``s retail banking operation may be for sale.
Bartlett said the one-bank structure had divided FNB and RMB into so many
new profit centres that the previously identifiable FNB and RMB operations
were no longer separable. But the banking group``s disclosure would improve.
Paul Harris, RMB``s chief executive, said: "We``re coming up to the year-end
this week and it``ll be a helluva FirstRand we``re reporting on."
He said the merger enabled the group to get the best out of a large balance
sheet.
"There``s an emerging level of buy-in and confidence in the group ... We see
this as the final procedural step of the merger."
FirstRand shed 18c to close at R6,66 ahead of the announcement yesterday.