Barclays Africa survives divorce to post seven per cent earnings increase

Barclays Africa Group Limited has posted a seven per cent increase in earning to R7.8 billion (Sh103 billion)for the first half of the year.

Yesterday’s announcement marks the first time the company reported results following Barclays plc’s sell-down of its majority stake in the African business in a share sale that saw exceptionally strong interest for the stock.

In may last year, the mother company released 12 per cent of its stake in the market via accelerated bookbuild in order to raise funds for re-consolidation of its shares in its indigenous markets in US and UK. It has since cut its stake from 62 per cent to less than 20 per cent in such selling ventures.

Even so, Barclays Africa’s revenues declined by one per cent to R36 billion (Sh252 billion) owing to a deteriorating economic environment in South Africa, which in turn caused pre-provision profit to decline 6 per cent.

The cost-to-income ratio increased to 55.6 per cent despite a focus on cost containment and inflationary cost growth. The return on equity remained attractive and improved to 16.8 per cent from 16.1 per cent reported last year.

“We are presenting a set of results that demonstrate the real value of the 2013 acquisition of the Barclays businesses in Africa. Both geographically, as well as by customer segment, they are proving their worth in yielding a strong performance for the first half, even as our biggest market, South Africa, has suffered the impact of an economic downturn,” said Maria Ramos, Chief Executive, Barclays Africa Group.

The group continues to have a sound financial position with balance sheet assets of R1.1 trillion and strong capital adequacy and liquidity reserve positions.

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