Trim Fat, Analysts Tell Barclays Africa

Correspondent | Monday August 3, 2015 15:20

Its stock fell 1.94 percent  to R183.28. The JSE’s other banks all rose, pushing the banking index 1.67 percent  higher.

“It was a reasonably good result in the current environment. I think it’s pretty much what the market expected,” PSG Wealth portfolio manager Adrian Cloete said.

One good thing in the results was that Barclays Africa was able to reduce bad debts, Mr Cloete said. Credit impairments fell 1 percent to R3.6bn aided by an improvement in home loan and credit card bad debts, and the commercial property portfolio in business banking in SA.

Gross loans and advances to customers were up 7 percent  to R674bn. Non interest income was up 4 percent to R13.9bn and net interest income increased 7 percent  to R17.2bn. Avior Research banking analyst Harry Botha said it was encouraging that revenue was starting to grow in the retail and business banking unit both in SA and the rest of Africa.

The wealth, investment management and insurance business reported a 14 percent  increase in headline earnings to R751m.

Kagiso Asset Management portfolio manager Jihad Jhaveri said for Barclays Africa to raise its return on equity from 16.4 percent  to its 18 percent target, it had to pay less tax in the rest of Africa and invest its unused cash.

“More difficult to execute on will be the need to reduce its high cost-to-income ratio in the retail side of the African business.

The corporate and investment banking side is fine,” Mr Jhaveri said. The bank would have to focus on costs, and grow revenue much faster than in recent years, he said. “There seem to have been early signs of success in this regard.” rovider in Botswana. It has a telecommunications infrastructure that is one of the most modern in Africa, with a network composed of an all-digital microwave, fibre optic systems and digital exchanges.

 

beMOBILE, the mobile arm of BTCL, was established in 2008. It has the widest network coverage in Botswana reaching over 90 percent of the population.