Barclays Africa delivers strong half-year performance as strategy gains momentum
Barclays Africa Group Limited announced an 11% increase in headline earnings for the first six months ended 30 June 2015 and remains firmly on track to deliver on its three year strategic priorities and market commitments.
Driven by a 7% increase in pre-provision profit to Rand 14.3 billion (USD 1.13 billion approx), the Barclays Africa Group’s headline earnings increased to Rand 6.8 billion (around USD 538.32 million) from Rand 6.1 billion (around USD 482.90 million).
This was powered largely by strong growth in Retail and Business Banking (RBB) on the back of a robust growth in customer base. Barclays Africa declared an ordinary dividend per share of 450 cents, a 13% growth over the corresponding period last year, given its strong capital levels and internal capital generation capacity.
Maria Ramos, Chief Executive of Barclays Africa Group Limited, stated: “Our growth strategy is now half-way through a three year journey and these results demonstrate that it is working. We have done what we said we would by delivering a strong performance driven primarily by the turnaround of the Retail and Business Banking. Through targeted growth and cost reduction, we are successfully growing in our chosen areas.”
RBB’s turnaround continues to gain momentum, with strong headline earnings growth of 17% to Rand 4.7 billion (around USD 372.07 million), largely drivenby a strong operational performance led by Home Loans, growing customer numbers and 14% higher non-interest income in Business Banking. This was complimented by focused cost management and lower credit impairments. The bank’s investment in digital technology, innovation and new, state-of-the-art branches is already paying dividends.
The transformation of the customer experience has seen the Retail Bank gain almost half a million customers during the half while internet banking users increased 17% and banking volumes through the Absa App more than doubled.
Excluding negative revaluations in its non-core private equity portfolio, Corporate and Investment Bank’s headline earnings grew 9%, driven by a 30% increase in corporate earnings and 58% higher Markets earnings outside South Africa.
The Corporate business outside South Africa was impacted by higher impairments and lower than anticipated loan book growth. An important driver of future growth across the continent will be the continued roll-out of Barclays.net, the Group’s integrated transactional banking platform.
Forex revenues from outside South Africa exceeded those earned in South Africa for the first time. Headline earnings from Wealth, Investment Management and Insurance (WIMI) increased 14% to Rand 751 million (USD 59.45 million approx) driven by geographic expansion, improved short-term insurance margins and growth in fiduciary services.
The business outside South Africa continues to expand with headline earnings growth of 76%. Attention will remain firmly on South Africa but Barclay’s has also expressed intent to invest in our other key markets to accelerate the growth opportunity across the continent.
Maria Ramos concluded on a positive note, declaring that Barclays Africa is well on track to meet its commitments to stakeholders.
“Our strategy is based on the strength of our franchise – an African bank that is fully local, fully regional and fully international. These results demonstrate that we are on track to achieve the commitments we have made. I remain excited by the potential for our business across the continent,” she noted.
About Barclays Africa Group:
Barclays Africa Group Limited is listed on the Johannesburg Stock Exchange and is one of Africa’s largest financial services groups, positioned as a fully global, fully regional and fully local bank.
Barclays Africa is 62.3% owned by Barclays Bank PLC (Barclays). At 30 June 2015, there were 847.8 millionshares in issue and a market capitalisation of Rand 155.0 billion (around USD 12.27 billion) with 12 million customers.
The bank is present in 12 countries and has its registered head office in Johannesburg, South Africa, with majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia