Johannesburg — FIRSTRAND , one of SA's big five banking and financial services groups, said spin-offs from the unwinding of the economic downturn would drive its earnings into the 2011 financial year, particularly in an improvement in nonperforming loans.

This was according to FirstRand CEO-designate Sizwe Nxasana, who gave a broad overview of operating conditions to shareholders at the annual general meeting yesterday. FirstRand's profit fell 30% to R6,93bn in the year to June 30, in line with SA's other retail banks.

Nxasana becomes the first black CEO of one of the big banking groups in SA when he succeeds Paul Harris as CEO on January 1.

Nxasana said SA's consumers were still struggling and in the process of "deleveraging" or repaying debt, which was why consumer spending had not started to rise yet.

The improvement in the economy would involve a "slow uptick" and he expected the credit loss ratio to fall to between 140 and 150 basis points by June 30 next year, which was an improvement from 180 basis points in the year to June 30 this year.

Over the longer term the group needed to deliver on its local and international strategy, said Nxasana.

In SA FirstRand's refocused strategy included diverse revenue streams, strong operating franchises, asset origination and distribution capabilities, and building blocks were in place to tap into profit pools in financial services in the country.

The refocused international strategy involved operating and expanding in markets that strengthened the group's position, with the focus on Africa and the African and Asia corridor.