Barclays Africa posts Sh1.3 trillion half year profit
What you need to know:
- She said impairments declined by 27 percent from a high base in the first half of 2016, contributing to the improvement in earnings.
Barclays Africa first half profit climbed seven percent to R7.8 billion (Sh1.3 trillion), the bank said in a statement today.
“The performance was attributed to strong earnings growth in Africa, despite an economic downtown,” Barclays Africa Group Chief executive Maria Ramos said.
She said impairments declined by 27 percent from a high base in the first half of 2016, contributing to the improvement in earnings.
The group, she further says, continues to have a sound financial position with balance sheet assets of R1.1 trillion and strong capital adequacy and liquidity reserve positions.
However, the group revenue declined one per cent to R36 billion (Sh6.1 trillion), given a deteriorating economic environment in South Africa.
This in turn caused pre-provision profit to decline 6 per cent.
The cost-to income ratio jumped to 55.6 per cent despite a focus on cost containment and inflationary cost growth, according to statement.
The return on equity remained attractive and improved to 16.8 per cent from 16.1 per cent.
For the second half, Barclays Africa will place priority focus on its retail and business bank performance in South Africa and on driving opportunities in its businesses outside of South Africa.
“We will continue to focus on retention of clients and assets, optimising opportunities presented by the pickup in momentum in retail and banking South Africa and returning the business in the rest of Africa to profitability,” noted Ms Ramos.
The bank, according to her, also continues its significant investment in technology to build a more efficient and lower –cost franchise.
“Our results today are testament to the resilience of our business and the momentum we are creating,” she said.
“We expect the economic environment to remain challenging but we believe the long-term opportunities remain attractive.”
South Africa is in a recession after Gross Domestic Product (GDP) shrank 0.7 per cent on an annualized basis in the first quarter.
Economic growth forecasts for the full year have once again been revised downwards.
