Integrated financial services group, FirstRand, reported a 13 percent reduction in normalised earnings from R10.1-billion to R8.8-billion and a return on equity of 20 percent.
The company released its June full-year earnings on Tuesday.
"As anticipated six months ago, the group has had to weather further tightening in its operating environments across its franchises," it said.
"Global and local capital markets will continue to see unusually high fluctuations, and conditions for the South African consumer will remain difficult."
FirstRand's disappointing results provided little surprise as the group had already warned in a voluntary trading update at the beginning of the month that its profits for the full financial year would be down as much as 10 percent.
At the same time, it warned that its numbers would be hurt by an expensive and unsuccessful entry into Australia by its subsidiary WesBank.
"WesBank took the decision in the year under review to exit its Australian operations.
"The process to sell the auto loan book has been finalised and the sale of WorldMark is on track and the group is optimistic that the net result of disposing of the lending operations should be largely offset by the eventual disposal of WorldMark," FirstRand said on Tuesday.
WesBank's overall profitability was impacted by significant increases in bad debts in its local retail lending businesses for the period under review.
"The compound effect of negative gearing has also resulted in asset growth slowing... Overall normalised earnings declined 38 percent to R573-million."
However, the performance of the Momentum Group reflected the remarkable resilience of the business "given the difficult trading environment," FirstRand said.
The Momentum Group increased normalised earnings 20 percent from R1.7-billion to R2-billion and delivered a return on equity of 30 percent.
This was a result of Momentum's strong market position with the high-end customer, it said.
In addition, its conservative capital management strategy immunised Momentum against volatility in equity markets.
"Sales via the FNB channels were strong, highlighting the success of its channel diversification strategy."
Turning to RMB, the group said losses in the Equity Trading division amounted to R1.4-billion, compared to a profit of R1.4-billion in 2007.
This included a loss of R1.9-billion in the international portfolio that was partially offset by a profit of R0.5-billion in the local businesses.
"The losses in the international portfolio occurred at the time of extreme disruption and dislocation in international equity markets," FirstRand said.
"There was a dramatic increase in volatility which necessitated additional capital to underpin the portfolios.
"There was a severe divergence in the correlation between the portfolio of small and mid cap stocks and the large cap indices that were used to hedge the portfolio."
FirstRand said this resulted in losses being incurred on both the portfolio and the hedges.
Looking ahead, the group said that given the current uncertain market conditions it "would not be appropriate to provide short and medium term earnings growth targets until stability returns to the macro environment and financial markets".
FirstRand is made up of a portfolio of financial services franchises including First National Bank, the retail and commercial bank; Rand Merchant Bank, the investment bank; WesBank, the instalment finance business; Momentum, the life insurance business; and Discovery, the health and life business.
