Barclays Bank Botswana rebounded to deliver a strong set of results in the second half of 2015 (H2:2015), doubling the first half performance to set alight its full year financial results for the year ended 31 December 2015.
Barclays achieved a positive Profit Before Tax (PBT) of P332 million for the year, after doubling its PBT to P222million in the second half from P110 million recorded in the first half. The bank’s resounding performance comes in the wake of subdued performance in the banking sector over the last two years, caused by regulatory changes and a general economic downturn largely driven by falling commodity prices. Despite these challenges Barclays still managed to significantly improve the business in H2:2015, and the bank remains bullish that the trend will continue into 2016.
Barclays’s full year audited financial results for the year ended 31 December 2015 indicate that net interest income increased by two percent while markets trading income grew by 31 percent. The bank’s operating costs growth was well contained at one percent while loans and advances grew by 20 percent to P9.8 billion. The credit loss rate was 2.5 percent and the cost to income ratio remained stable at 55 percent, reflecting continued focus on improved efficiency in the business and strategic cost reduction programmes.
Speaking at the results announcement, Barclays Managing Director Reinette van der Merwe said the bank increased its momentum in the second half leading to a significantly positive impact on its full year results. She further stated that Barclays grew its assets in retail and business banking through loans to the agriculture, retail and tourism sectors.
“Our retail business registered strong growth in primary customers, number of accounts and customer loans, while deposits were relatively flat. It was however impacted by higher impairments,” said van der Merwe.
She further said they still see significant opportunities for growth in the retail business.
“An important driver of our growth will be a higher adoption rate of our digital channels. We have significantly improved the customer experience through investing in digital technology and innovation,” she said.
Barclays also has a strong balance sheet of over P14 billion; and the bank remains well capitalised and independently funded. The bank also grew its customer numbers by five percent in 2015 to over 150 000.
Meanwhile, Barclays Finance Director Mumba Kalifungwa said loans and advances to customers increased by 20 percent year on year to P9.7 billion, largely driven by corporate and business banking segments that grew 122 percent and 76 percent respectively.
“Our 62.5 percent higher credit impairment was driven largely by personal loans. During the year we also absorbed the impact of two mines that went into liquidation with an impairment of P41million in total,” he said.
After sustaining a dividend pay-out year on year, Barclays has proposed a final dividend of 7.62 thebe, which amounts to P65million. Kalifungwa said this translates to a dividend pay-out ratio of 63 percent of the earnings, above their average pay-out ratio of 60 percent over the last three years. He further revealed that the bank lost interest income of P100 million through interest rate cuts totalling 150 basis points during the year. Nevertheless, Barclays’ interest income grew four percent, showing growth in retail, corporate and business banking.
“Our cost to income ratio remained stable at 55 percent reflecting continued focus on improved efficiency in our business and strategic cost reduction programmes,” Kalifungwa said.