Banking supermajor FirstRand says it is not under pressure to acquire a bank in Kenya, despite actively looking for acquisitive growth in a country where it maintains a representative office.This comes about as South African banks fall over themselves to strengthen their position in East Africa’s economic powerhouse.FirstRand CEO Mary Vilakazi says the group has been looking for an opportunity to buy a bank in Kenya for some time, but that they were waiting for the right opportunity.“We have been looking for opportunities in Kenya, even in my previous role [COO]. However, there must be a willing seller at the right price for us to do any deal. What we will not do is overpay for any asset,” Vilakazi said.The group’s Africa region portfolio covers Botswana, Lesotho, Mozambique, Namibia, Zambia, Eswatini and Ghana, where it has a banking presence.The company, worth R540bn on the JSE, maintains representative offices in Kenya and Ghana, while it has a corporate and investment banking presence in Nigeria.Read: UK car finance commission probe provision hurts FirstRand’s earningsAbsa has recently increased its stake in its Kenyan business to about 72%. Nedbank earlier this year made a foray into Kenya in a R13.9bn deal to buy a majority stake in NCBA — a lender that boasts a 60-million-strong client base across Kenya, Tanzania, Uganda and Rwanda, alongside a high-performing digital fintech lending operation.Standard Bank is said to have also shown interest in NCBA, as it looks to strengthen its position in East Africa.Group CEO Sim Tshabalala has visited Kenya twice this year, meeting the country’s central bank governor and the head of state, among other officials.Vilakazi said FirstRand was expanding its footprint in broader Africa.“The strategy is to enter markets that offer structural system growth, where the group can bring a competitive advantage and scale. Thus far, this strategy has been mainly organic in nature, supported by medium-sized bolt-on acquisitions that bring customers, systems and scale,” she said.“The retail and commercial bank, FNB, continues to make good progress in growing its in-country franchises, particularly in retail and commercial deposit-gathering and transactional activities. “In addition, the corporate and investment bank, RMB, also continues to scale the activities of its in-country corporate and investment banking (CIB) franchise. In conjunction with this, it has established a strong cross-border business across, through providing integrated service offerings to clients operating on the continent.”The strategy is to enter markets that offer structural system growth, where the group can bring a competitive advantage and scale. — Mary Vilakazi, FirstRand CEO Earlier in the day, FirstRand said its results for the year to end-June were hurt by the liability over the UK probe into the vehicle finance commission, which continues to haunt the financial services group, with it raising a substantial provision for redress, which has weighed on its overall performance.FirstRand said by end-June it has recognised an additional pretax provision of £518.4m for potential customer redress arising from the Financial Conduct Authority’s (FCA) review of historical motor finance commission arrangements and £29.4m in associated costs. The gross undiscounted provision, including the expected extension of the scheme start date, is £807m, it said.The increase from R5.8bn at end-June last year reflects revised estimates after the FCA’s publication of its final redress framework in March.Vilakazi said FirstRand had delivered an “excellent operational performance”, mainly as a result of double-digit profit growth from both FNB and RMB.“These outcomes reflect the strong topline growth, profitability and improved returns generated by the group’s two largest franchises. The guidance did not, however, include an additional provision for the UK motor commission matter. Disappointingly, the group was eventually required to raise a provision, which has impacted overall earnings,” she said.The financial effect of this provision is material to the year-on-year performance, with headline earnings at R39.7bn, down 5%, the group said.The group has decided to normalise the performance for the UK motor commission provision for the 2025 and 2026 financial years. With its exclusion, normalised earnings increased 10%, with an ROE of 21.5%, it said.“Given the strong earnings capacity generated by the South African and broader Africa businesses, normalised continuing earnings increased 13% at an ROE of 24.9%. The group considers these metrics to reflect the true ongoing operational performance of the business,” it said.However, HEPS for continuing operations were up just 1% at 693.1c and down 5% for total operations to 712.9c. The ROE remained within the group’s stated range at 18.3%. The strong capital position has allowed the board to declare dividend growth of 16% to 280c per share.FirstRand said the provision for the FCA’s review represents management’s best estimate of the expenditure required to settle obligations, including compensatory interest and incremental legal, regulatory and operational costs to administer the scheme.“Significant estimation uncertainty remains, given the scale and complexity of the remediation process and ongoing legal developments. Legal challenges to the FCA’s scheme were announced in April, with related hearings expected between December and February. “These developments are likely to delay commencement of the redress scheme and the timing of any customer payments. The group has not incorporated the potential impact of these legal challenges into the provision estimate,” it said.It added that the ultimate financial effect could “differ materially” from the amount presently recognised, for example if the actual experience of the FCA’s remediation scheme differs from the group’s assumptions once it is implemented. “For illustrative purposes, a 5% increase or decrease in the number of customers that require redress would increase or decrease the provision by £51.5m.”Business Day