Helen Nyambura-Mwaura
BARCLAYS Africa Group had applied for a Nigerian banking licence and wanted to take over the Egyptian and Zimbabwean units still run by its parent company, it said yesterday after reporting higher profits.
Like other local firms, banks in the continent’s most advanced country are setting up operations in sub-Saharan Africa to tap growth from the robust economies there and hedge against stagnating growth at home.
Africa’s third-biggest lender said it was in talks with its British parent to take over the two African operations left out of a 2013 all share deal that saw it acquire eight country subsidiaries on the continent.
Zimbabwe and Egypt were excluded from that arrangement because of political crises at the time. “We would be keen to acquire those two countries into the portfolio, but it has to be done at a competitive price,” chief executive Maria Ramos said yesterday.
Barclays said businesses outside South Africa contributed 19 percent of group revenue, just below the 20 percent to 25 percent the company is aiming for by next year.
Growth in Africa was key to Barclays, an analyst said.
“Bedding down Africa will be the big driver in the five big markets,” said Patrice Rassou, the head of equities at Sanlam Investment Management, referring to South Africa, Kenya, Ghana, Zambia and Botswana where Barclays aims to be a top-three bank.
Barclays posted a 10 percent rise in annual earnings by pumping up lending on one hand, while squeezing bad debts on the other, similar to its smaller rival Nedbank. Fourth-ranked Nedbank grew full-year earnings by 13 percent, while pack leader Standard Bank reports tomorrow.
Barclays Africa said diluted headline earnings a share totalled R15.37 in the year to December, from R13.97 a year earlier. Headline earnings a share, which excludes certain items, is the main measure of profit in South Africa. Net interest income climbed 10 percent to R35.6 billion while credit impairments contracted 10 percent to R6.3bn.
The bank’s customer base grew by 7 percent over year, partially plugging a haemorrhage that saw it lose accounts to rivals such as First National Bank, which has been on a marketing blitz to grow client numbers.
Shares gained as much as 1.77 percent before closing 3.28 percent down at R184.25 yesterday, compared with the banks index, which dropped 1.11 percent. – Reuters page 22