• Sees profit after tax grow 15.8%
• Earnings Per Share up 16%
• Declares 11.7 Thebe Dividend
Amid operating in hostile conditions which include lower interest rates and reduced liquidity, Barclays Bank of Botswana has seen improved results when compared with the previous reporting periods.
Barclays has seen its profit after tax grow by 15.8 percent, better than the 29 percent decrease registered in the previous year. The losses suffered in preceding periods were blamed on the implementation of the bank’s ambitious five-year strategy of becoming the ‘Go-To’ bank launched in 2013.
The implementation of such strategy came with costs that escalated and negatively impacted on revenue.
In 2013, the operating costs increased by 10 percent, however in 2014 the costs increased by 4.7 percent. The latest cost growth is said to be investment in staff and leadership and infrastructure which include the recently opened head office. Other key drivers include the roll out of intelligent ATM nationwide.
The financial statements released on Thursday show that the strategy is beginning to bear fruit. Barclays has reported a 16 percent increase in earnings per share to 39.4 Thebe while return on equity improved to 23.2 percent from 21 percent a year ago.
The bank executive management now believes the tables have turned, and the strategy which is intended to stabilise business is now paying dividends. “We have delivered as planned despite the continued challenges in the local business environment including low interest rates, tight liquidity, a moratorium on bank charges and increased competition and increased competition in the market,” Barclays Managing Director, Reinette van der Merwe said of the results.
Through the strategy, Barclays seeks to invest in its people and leadership to create an engaged colleague base. Further it seeks to grow corporate and SME business while selectively growing retail portfolio. This, according to the bank MD, will be achieved through optimisation of the balance sheet while ensuring continuous investment in the business.
With the strategy, van der Merwe believes they will start to achieve profit growth and increase Return on Equity. She explained that strategy the roll out is to ensure that all opportunities and activities the bank embarks upon drive the business forward.
With regard to latest financial performance, van der Merwe said key drivers for the performance have been improved, with collections growing to ensure that the bank’s overall impairment charge is reduced.
She added that the higher quality of loan bookings made during the year have also improved the structure of the portfolio on both retail and corporate. During the year, loans and advances to customers increased by 10.8 percent, with retail loans growing by 9.6 percent on the back of secured lending. Corporate loans grew by 17.5 percent.
This growth is linked to support by senior debt issuance from the listed P2 billion Medium term Note Programme to match tenure of longer dated assets, increased deposits to banks and P60 million increase in balance with related companies.
A dividend of 11.7 Thebe has been declared for the period ending 31 December 2014. By Friday the share price of Barclays bank was trading at 400 Thebe per share.