Barclays Bank of Botswana has delivered an excellent overall performance despite severe economic disruptions among them slowing economic growth and a general slow rebound in commodity prices. Barclays registered 49 percent growth in profit before tax (PBT) compared to the previous period, going up from P332 million to P494 million. Growth is said to been hinged on sustained revenue growth in the Retail and Business (RBB) segments which grew by 11 percent and also growth from the Corporate and Investment (CIB) segment. Bank Managing Director, Reinette van der Merwe said this performance demonstrates progress made in transforming Barclays into a resilient business. Van der Merwe said such growth in PBT is a welcome growth taking into account the headwinds that the financial services industry and the country as a whole faced during 2016. Some of the highlights for Barclays’ performance include a 9 percent increase in Net Interest Income (NII) and a 5 percent growth of the balance sheet. During the year, Van der Merwe said they were able to control costs, as operating costs increased by 3 percent, which she said remained well contained with an improved cost to income ratio at 49 percent, down from 55 in the previous year.
Barclays Finance Director, Mumba Kalifungwa, said the bank achieved overall revenue of 16 percent year-on-year in comparison to 2015. Kalifungwa said despite the various challenges experiences in 2016 such as low growth in formal employment, rising household indebtedness and increase in non-performing loans, the RBB business witnessed steady improvement in financial performance during the year with its segmental PBT growing by 44 percent. He said this proves progress that the bank continues to make in execution of its strategy which is focused on enhancing customer experience and in turn diversify the bank portfolio. Kalifungwa said the NII, which grew by 9 percent, was driven mainly by strong balance sheet growth and optimal utilisation of funding sources, which resulted in a net reduction of interest cost year-on-year by 26 percent. Barclays has managed to reduce impairment growth which Kalifungwa said was all due to proactive efforts to manage underlying impairment risk; through cautious and selective lending to high risk sectors. These interventions, according to the Barclays Finance Director, improved the overall quality of the bank’s loan book and resulted in marginal contraction in retail loans and advances compared the period before. In 2016 Barclays grew by 7 percent compared to 62 percent growth seen in 2015. Furthermore, Kalifungwa said management took a prudent view to accelerate recognition of retail impairments provisions related to personal loans of employees of one of their mining clients.