Thursday, July 18, 2024

Barclays Bank delivers on its promise

Barclays Bank Botswana has delivered its promise of leveraging their digital channels to drive customer uptake and expand the service offering on their digital platforms for profitability.

The bank last week cautioned that its consolidated results for the year ended December 31, 2016 will be significantly higher than those reported for the previous year.

 The bank last year stated that it saw business banking as a growth area and continued to look at ways to improve the client experience and subsequently contribute to the clients’ business growth.

The bank’s previously said the profitability for the year was largely driven by overall stability in revenue which grew by 1 percent year on year and contained operating costs where it realised below inflationary growth year on year.

Barclays Bank Botswana Managing Director Reinette van der Merwe said at the time that growth in revenue for 2015 was largely driven by the corporate and investment banking business, and the business banking unit which registered momentous volume growth across both their customer assets and liabilities products. 

She added that their trading business alone grew by 31 percent due to increased cross sell activities and customer penetration. 

“This positive outcome is in line with our strategic focus to increase our fee income growth as a way of ensuring sustainable mix in income growth between interest income and non-interest income,” stated Van der Merwe.

Barclays Bank also stated that revenue growth for the previous period was attributable mainly to net interest income that grew by 2 percent year on year despite a growth in interest cost by 14 percent arising from tight liquidity conditions that prevailed in the earlier part of the year.

A look into the financials at the time reveal that the business achieved a Profit-Before-Tax (PBT) of P332 million for the year ended December 31, 2015. 

This was on the back of a strong second half performance where the bank doubled its first half financial performance, achieving PBT of P222 million in comparison to P110 million in the first half of 2015.

At the time Barclays got an increase in net interest income by 2 percent, markets trading income grew by 31 percent, operating costs growth was well contained at 1 percent while loans and advances grew by 20 percent to P9.8 billion

The bank’s customer liabilities grew by 23 percent to P11 billion while credit loss rate was 2.5 percent, the cost to income ratio remained stable at 55 percent reflecting continued focus on improved efficiency in our business and strategic cost reduction programmes.

“Our financial performance is a reflection of how we are delivering on our commitments. Performance in the banking sector has been impacted over the last two years by regulatory changes and the general economic downturn largely driven by falling commodity prices,” she said.


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