Barclays profits down on market headwinds
Pauline Dikuelo | Tuesday March 22, 2016 14:36
According to the bank’s managing director, Reinette van der Merwe despite the challenges that bedevilled the banking sector for the past two years, which included low interest rates and economic downturn, they managed to significantly improve the business in the second half of the year.
“As at 30 June 2015, our profit before tax stood at a third of this amount, this full-year performance therefore indicates that our second half profitability was double what we achieved in the first half of the year 2015,” van der Merwe said.
“We remain on an upward trajectory and are upbeat for the year that lies ahead. Our net interest income increased by two percent while our market trading income grew by 31 percent,” she added.
The bank’s operating costs growth was well contained at one percent while loans and advances grew by 20 percent to P9.7 billion due to corporate and business banking segments that rose 122 percent and 76 percent respectively.
The managing director said they grew their assets largely 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. Our retail performance was however impacted by higher impairments,” she said.
Customer liabilities rose by 23 percent to P11 billion while interest income grew by four percent, driven by business and corporate banking which registered a strong growth driven by the positive balance sheet momentum.
The bank’s cost to income ratio remained stable at 55 percent reflecting continued focus on improved efficiency in the business and strategic cost reduction programmes.
The bank’s corporate and investment banking turnaround continues to gain momentum, growing revenue by 39 percent year-on-year.
“We delivered strong asset growth with lower credit impairments, as we grew our customer assets by 77 percent on the back of new asset bookings despite the slow domestic economic environment resulting in CIB’s profit before tax growing 58 percent,” she said. In addition the MD said they have improved customer experience through investing in digital technology and innovation as about 39 percent of their customers are now using internet banking, while 51 percent have adopted mobile banking platform, Hello Money. Barclays grew its customer numbers by five percent in 2015 to over 150,000. The bank, which currently has 177 ATMs countrywide, employs 1,200 people and operates 37 branches. Over the last three years, the bank had invested over P12 million into communities in Botswana.
“Last year we paid P93.8 million in taxes and our shareholders will receive a total dividend of P165 million for 2015, subject to regulatory approval.”