Barclays Bank profitability has gone up 144 percent year-on-year with growth mainly driven by revenue from the retail banking business and Corporate and Investment Banking (CIB). The bank’s Finance Director, Mumba Kalifungwa, said on Thursday during the presentation of half year results that retail segment registered growth of 10 percent, mainly driven by increased transactional volumes. He said in line with their business strategy, they have realised significant growth in CIB as well as Business Baking segments where they achieved revenue growth of 58 percent and 22 percent respectively. According to Kalifungwa, the retail segment remains a significant driver of revenue generation, being the largest revenue contributor. For the period under review, Barclays posted profit before tax of P270 million, a 144 percent growth year-on-year compared to P111 million registered during the first half of 2015. Year-on-year revenue grew by 27 percent due to strong balance sheet increase and non-interest revenue growth in all business segments. The bank’s balance sheet grew by 12 percent.
The bank Finance Director said some of the factors that drove the business in the year were; efficient balance sheet utilisation, improved margins, increased foreign exchange transaction volumes, generally increased transaction volumes and the 10% growth of customer base. On impairments, Kalifungwa said they were able achieve a reduction of 16 percent year-on-year largely driven by an improvement in retail loan losses. He said the impairment loss rate reduced year-on-year to 1.8 percent from 2.5 percent. The improved performance, he said, is all thanks to a revised collections model and continued focus on monitoring and control activities relating to debt collection. Due to the consumer stress that is currently being seen in the environment, Kalifungwa does not rule out the possibility of seeing the year-on-year gains being reversed.Barclays credit extension increased by 18 percent year-on-year to P9.9 billion and this is said to have been driven mainly by the corporate and business banking segments that grew by 79 percent and 116 percent respectively. Kalifungwa said this was predominantly in chosen businesses where the bank offered various debt and transactional solution products.
Meanwhile Barclays Bank Managing Director, Reinette van der Merwe, said the banking industry in Botswana will have to devise strategies in order to accommodate low interest rate environment and changing customer needs. She was speaking in response to the decision by the central bank to slash the bank by 50 basis points last month to take the bank rate to 5.5 percent, effectively reducing the prime lending rate to 7 percent. Going into the next half, Van der Merwe said they remain cautiously optimistic about the bank’s performance explaining that the economic performance remains sluggish with a number of companies reportedly planning retrenchment of employees to rationalise their operating costs.