Johannesburg - Barclays Group Africa, the lender being sold by its London-based parent, forecast that its credit-loss ratio will worsen as customers fall behind in loan repayments and economic growth in its main South African market deteriorates.
A continued focus on increasing revenue and managing expenses “should improve our cost to income ratio further,” helping the lender to maintain a return on equity, a key measure of profit, for 2016 at levels similar to last year, Johannesburg-based Barclays Africa said in a statement on Thursday.
The company expects to maintain “low single-digit loan growth” with the rest of its African operations expanding faster than South Africa, it said.
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Barclays plans to sell down its 62 percent stake in the African unit, formerly known as Absa, to boost capital.
Bob Diamond, who ran Barclays before his 2012 ouster during the Libor scandal, this week confirmed that he and investors including US private-equity giant Carlyle are working together on a potential bid for the Johannesburg-based lender.
The London-based parent company on Wednesday said that it is “pleased with the level of indicative interest” in the African business and that it is working closely with local management, including on the planning for the “operational separation of the two businesses.”
Read also: Diamond confirms Barclays rumours
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