Barclays leads the pack as profits soar

Brian Benza
Staff Writer | Tuesday March 30, 2010 00:00

 

This  puts Barclays on top  of the other two major competitors(Stanchart and FNBB) in the industry as it is  the only  one to  have registered a rise in profits before tax.

Standard chartered bank last week  announced a  23 percent plunge in Profits before tax  to P 285.4 million  while  FNBB, although its financial year ends in June, last month announced a 3 percent plunge profits for the six months  ended December 2009.  For the year up to  June 2009, FNBB  had a profit before tax of P528 million.

Announcing the full year results  up to December 2009, Barclays  says   despite the difficult operating environment in which most of their clients had weakened disposable incomes coupled with reduced creditworthiness, they Managed to report a 7.9 percent year on year increase in Earnings Per Share (EPS) to P 0.53. On the other hand, EPS for Stanchart plunged 19.5 percent to P 0.82. Net interest income increased by 30 percent to P1.025 billion driven by higher volumes in customer loans largely due to a 23.5 percent decline in interest expense and a 2.7 percent increase in interest income which itself was bruised by the 5.5 percent reduction in the bank rate last year. 

 Loans and advances to customers grew to P5, 8 billion from P5, 2 billion in 2008. ' This asset growth was in part offset by a decline in liabilities: particularly in deposits from corporate clients as businesses reduced their cash reserves to manage through the global economic crisis,' said the bank in a statement. 

Total income for the bank increased by 17 percent to P1.3 billion with the increase in net interest income partially offset by a decline in fee income, largely due to a reduction in Treasury activity during the year.

'Impairment grew by P143m to P204m (2008: P61m) reflecting our growth in retail unsecured lending in recent years and the challenging economic conditions.  ' We continue to monitor our credit risk policies and delinquency levels closely to ensure that the risk in our portfolio is correctly priced.  Credit policies have been tightened and during the year we have significantly increased our account monitoring processes,' said the bank. 

 While Barclays' net interest income increased by 30 percent in the difficult year, Standard Chartered Bank, their oldest competitor in the sector did not enjoy similar fortune as their net interest income declined from P545.5 million in 2008 to P496.9 million in 2009, an 8.90 percent fall.

For the year 2009, Stanchart reported   a 0.1 percent decline in operating income at P740.5 million from P741.5 million in 2008   while   their operating expenses went up 17.48 percent to P379.7 million.  Similar to Barclays, Stanchart's loan book also grew by 11.7 percent albeit the latter's is at a lower P3.48 million. Thuli Johnson, Barclays Botswana Managing Director, said: 'Our strong financial performance in the face of one of the most challenging economic environments seen in Botswana's history is testimony to the continued focus of all employees on supporting our customers.   While the economy is not expected to improve markedly in 2010 I am confident that the continued pursuit of our strategy which has served us well over the past years and staying closer to our customers will ensure that we deliver for our customers, shareholders and colleagues.' Looking ahead, Barclays says that it has started 2010 well, building on the momentum seen in retail banking in 2009 and on the investment made in infrastructure and colleagues in recent years.Barclays Botswana has recommended a final dividend payable to shareholders of 17.60 thebe per share.