* Outgoing CEO says very optimistic about future
* FirstRand H1 profit growth slows to 6 pct vs 14 pct
* Shares up 1.3 pct, lags rivals and broader market
* Incoming CEO says won’t tinker with strategy (Adds incoming CEO comments in paragraph 13-14)
By Tiisetso Motsoeneng
JOHANNESBURG, March 6 (Reuters) - FirstRand gave a cautiously optimistic outlook on Tuesday, joining other South African businesses pinning their hopes on the country’s new political leadership.
Companies in South Africa are banking on President Cyril Ramaphosa to follow through on promises to kick-start the economy, fight corruption and bring policy certainty.
Banks like FirstRand have largely borne the brunt of a stagnant economy and political uncertainty relating to corruption allegations surrounding former president Jacob Zuma, who denies any wrongdoing.
“We are very optimistic about the future but we need to balance that with the fact that it would take time to fix some of the structural issues,” FirstRand’s outgoing chief executive Johan Burger told Reuters by telephone.
Zuma was replaced last month after a nine-year tenure of what analysts called economic mismanagement that led two credit rating agencies to downgrade the country’s debt to junk as a weak economy hit investment and consumption spending.
“In the short to medium we’re still going to have relatively low economic growth rate,” Burger added after First Rand, the country’s biggest lender, reported a 6 percent increase in half-year diluted headline EPS, a key profit measure in South Africa, to 224 percent, a substantial slowdown from a year ago.
FirstRand, along with its rivals, has struggled to grow lending at a faster rate, as a stagnant economy and high personal debt levels have hit both investment and spending.
Finance minister Nhlanhla Nene, part of Ramaphosa’s new team, said this week that 2018 economic growth estimate - forecast to grow by 1.8 percent in a Reuters poll - would be revised upward by October due to improved business confidence.
While higher, the rise in FirstRand’s EPS was less than half the 14 percent rise posted in the same period a year before, while net interest income, a key measure of lending profitability, increased 7 percent to 23.7 billion rand ($2.01 billion), it said in a results filing.
Burger’s strategy has included reducing its reliance on South Africa and it has been looking at developed markets for growth, while scaling up branches elsewhere in Africa.
FirstRand said it had secured regulatory approval for its 1.1 billion pound ($1.52 billion) acquisition of British banking newcomer Aldermore.
Burger will step down at the end of the month and be replaced by his deputy Allan Pullinger, a 20-year company veteran. Pullinger said he would not fiddle with strategic priorities that also include growing the company insurance, savings and asset management offering.
“I have been part of the strategic thinking for many years now and we’ve received feedback which tells us we’re onto a good story,” Pullinger said. “What you’re going to see is increased focus on the execution of that strategy.”
Shares in FirstRand rose 2.49 percent to 76.05 rand as of 1152 GMT, lagging a 3.08 percent rise in the sector and the broader market. ($1 = 0.7232 pounds) (Editing Biju Dwarakanath and Alexander Smith/Mark Heinrich)