Firstrand Ltd. (FSRJ.J): Sector leading returns with capital return upside; reiterate Buy

We view FirstRand as the best positioned South African bank in our coverage, supported by leading retail and corporate franchises, resilient asset quality and disciplined capital allocation. We see FirstRand as one of the most leveraged to a recovery in the SA macro backdrop, while the planned Aldermore disposal should unlock capital for higher-return growth opportunities, selective acquisitions and shareholder distributions. We de-consolidate Aldermore and present it as discontinued operations, in line with company reporting. While this materially reduces reported P&L line items, our total normalised earnings are broadly unchanged. A disposal should be structurally ROE accretive given Aldermore's lower returns vs. FirstRand's continuing franchise, in our view improving the quality and sustainability of earnings. We forecast high-single-digit NII and NIR growth, supported by volumes, resilient margins and strength across Private Equity and Global Markets. Alongside c.6% opex growth, th