Thursday, August 18, 2022

Barclays Africa can only become bigger – Ramos

Barclays Africa says is sees a lot of opportunities in the Botswana market in different sectors of the economy for the expansion of the bank.

Barclays Africa Group Chief Executive Maria Ramos said Botswana was one of the markets that were contributing significantly to the group adding that it was one of the top five countries.

She stated that the Barclays Africa Group operations in 12 countries in Africa reported a third consecutive year of earnings growth.

The bank’s headline earnings increased by 5 percent to R14.9 billion, with South Africa up 2 percent to R12.2 billion and the rest of Africa up 17 percent to R2.8 billion.

The  pre-provision profit increased by 10 percent to R32.4 billion while revenue increased by 8 percent to R72.4 billion  and contribution from non-SA businesses rose to 23 percent of group revenue

Ramos stated that the revenue grew 8 percent while costs increased by 6 percent, with positive effect on the cost-to-income ratio, which improved to 55.2 percent during the period. She added that the bank’s impairments increased by 26 percent resulting in a credit loss ratio of 1.08 percent from 0.92 percent

“The creation of the Barclays Africa Group was a crucial strategic play – it created the platform for us to develop our businesses. It has given us a significant footprint across Africa. We set out with a vision to create a proudly pan-African bank and today we can confidently say that we are a delivering on this ambition,” she said.

She stated that a key priority since the formation of the group was stemming losses at their retail and business banking (RBB) franchise in South Africa, which remains their largest revenue generator. She added that RBB added 2.5 million new customers over the last three years, generating strong returns. 

Ramos said other priorities over the past three years included growing their corporate banking operation, which has achieved double-digit growth for the past four years; and, delivering on the opportunity they have in their Wealth, Investment Management and Insurance (WIMI) business, which is achieving an attractive 23.9 percent return on equity.

2016 performance

She spoke of Barclays Africa Group’s headline earnings that increased 5 percent to R14.9 billion in 2016 compared with 2015 as efforts to contain costs and increase efficiencies in order to invest in delivering better services to customers yielded results. She said revenue increased by 8 percent, outpacing the 6 percent increase in the cost of running the business.

Slower economic growth resulted in an increase in impairments, and non-performing loans, where customers are more than three months in arrears. South Africa’s economic growth is expected to have slowed to 0.4 percent in 2016, said Ramos.

Ramos says in 2017, Barclays Africa Group expects to see modest economic recovery with South Africa’s economy estimated to grow at 1 percent, adding that they also expect 4.5 percent average GDP growth in other markets.

 “Moderate economic growth and regulatory changes will impact revenue growth. Positively, we expect that some of the bad debts recorded last year won’t be repeated,” said Ramos.


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