Barclays Africa achieves strong financial momentum |04 August 2014

• Aims for “Go-To’ bank in Africa

Barclays Africa Group Limited’s (Barclays Africa) financial results for the six months ending June 30, 2014 have reflected a 10 percent increase in the group’s headline earnings to R6.1 billion.

This is underpinned by strong financial momentum across business despite a contraction in South Africa’s GDP in the first quarter of this year
Growth in Barclays Africa’s markets outside South Africa remained resilient, notwithstanding a slowdown in key economies such as Ghana and Zambia. And it was also said that the Barclays Africa is set to become the “Go-To” bank in Africa – the destination of choice for customers and clients.

These were revealed by Maria Ramos, group chief executive of Barclays Africa and David Hodnett, Barclays Africa group deputy chief executive and financial officer, during a media briefing at the Hilton Hotel in Sandton, South Africa.

Barclays Bank (Seychelles) officials could follow the briefing via a live conference call held at the bank’s boardroom at Capital City building in Victoria in the presence of acting managing director Koranteng Kwabena and other high officials.

“We have taken the time to develop the right strategy for Barclays Africa and have been very clear that this would take three years to deliver. Our results for the first six months of the year demonstrate the traction we are gaining in executing on this strategy and how well we are progressing towards realising our ambitions on the continent. We are transforming the business in the right areas by executing on our four strategic priorities and are determined to accelerate our momentum even faster,” said Ms Ramos.

In February, Barclays Africa outlined four clear targets to grow the business. These include: to be top three by revenue in the group’s five largest markets by 2016; to achieve an ROE (return on equity) in the range of 18-20% in 2015; to achieve a cost-to-income ratio in the low 50s by 2016, and to achieve a revenue share of 20-25% from outside of South Africa by 2016.

The group’s CEO added that six months into their three-year strategy, they are exactly where they wanted to be. They have grown their revenues by 7% while their return on equity has improved to 16.1% and are confident that they can achieve the necessary milestones this year to reach their 18%-20% target. She said as expected, the cost-to-income ratio has increased because of the investments they are making to transform the business over the medium term. Growth outside of South Africa has been strong and this portfolio now constitutes 20% of group revenue which is already within the range we have set as a target for 2016.

To deliver on their One Africa strategy Barclays Africa prioritised four strategic areas to execute in 2014 and solid progress has been made on each of these: the turnaround programme for the group’s South African Retail and Business Banking (RBB) franchise, based on simplifying processes, reshaping its branch network and investing heavily in its digital products, is taking effect. Customer numbers have stabilised and the group has reported growth in important segments like the core middle market and commercial segments; investing in corporate banking across the continent is paying dividends.

Corporate and Investment Bank recorded a 24% increase in headline earnings to R1,903 million, driven by solid revenue growth across all core business units (corporate revenues increased by 11% and investment bank revenues by 20%) as well as focused cost management; having obtained the license for Barclays Life Assurance Kenya, already early signs of capturing the growth opportunity in its Wealth, Investment Management and Insurance franchise are emerging. While the business reported flat headline earnings of R688m, solid headline earnings growth for Wealth and Investment Management (11%), Short-term Insurance (11%) and Fiduciary Services (24%) were offset by Life insurance earnings and a loss after tax in the Distribution business; Barclays Africa has further built out the strength of its management team over the past six months and is investing in talent retention.

Maria Ramos concluded that by the end of the year she expects the Group will have made further progress in the turnaround of their Retail and Business Banking business with a particular focus on their business banking franchise.

“We will also have significantly advanced the roll-out of our corporate business and completed our next phase of expanding our insurance business into East Africa. If we continue to execute well on our stated priorities, I have no doubt that we will become the ‘Go-To’ bank in Africa – the destination of choice for customers and clients,” concluded Ms Ramos.

Commenting on the target of making Barclays Africa the “Go-To” bank in Africa, the Barclays Bank (Seychelles) Limited acting MD Koranteng Kwabena said the aim of the local bank is to make clients happy with their services and having no reservation in using them.

“Barclays Bank (Seychelles) Limited has invested in new technologies and these include its revolutionary digital banking solutions launched recently. It consists of Online Banking; Mobile and Tablet Banking; SMS Alert; eStatements; Barclays Integrator; Online Tax Payments and Online Card Acceptance.

Barclays Africa Group Limited (Barclays Africa Group or the Group) is 62.3% owned by Barclays Bank PLC (Barclays) and is listed on the JSE Limited. The group is one of Africa’s major financial services providers offering personal and business banking, credit cards, corporate and investment banking, wealth and investment management as well as bancassurance. We combine our global product knowledge with regional expertise and have an extensive, well-established local presence.”

Compiled by M. Julie