Barclays profits up 37pc

via –BizDay – Barclays profits up 37pc

HARARE – Barclays Bank Zimbabwe (Barclays Zim), a unit of British multi-national banking and financial services group, posted a $1,1 million profit before tax in the half year to June 2013, up 37 percent from prior comparable period.

George Guvamatanga, Barclays Zim’s managing director, said while post tax profit also increased to $8 million from $5 million during the period under review, internal income suffered slower growth.

“This performance was behind our internal income growth targets which suffered from slower growth in transaction volumes and capped fees and charges,” Guvamatanga said.

Early this year, banks — through the Bankers Association of Zimbabwe — signed a Memorandum of Understanding with the Reserve Bank of Zimbabwe under which the institutions agreed to slash bank charges and cap lending rates among other reforms.

The move, analysts have said, eroded banks income, particularly non-funded.

During the six months under review, the local unit’s liquidity ratio stood at 57 percent against the regulatory 30 percent.

Loans went up 64 percent to $97,5 million, representing a 6,2 percent year-to-date increase.

Deposits recorded a 2,4 percent year-to-date growth.

“This largely comprises demand deposits. As the loan book grows, liability growth is projected to grow faster than the rate obtained in the first half,” Guvamatanga said.

Year-on-year costs went up 8,8 percent while income grew 10,1 percent.

“This resulted in a positive jaw, we also project that inflationary pressure in the second half will get higher than the first half but our target is to keep costs within our planned level,” the Barclays boss said.

Barclays Zim is one of the four foreign-owned banks under pressure to comply with the country’s indigenisation policy — compelling all foreign-owned firms to cede 51 percent shareholding to black locals.

The group did not comment on its indigenisation plan.

The other three are MBCA, Standard Chartered and Standard Bank-owned Stanbic.

This comes as Barclays Zim has launched projects to boost its presence in Zimbabwe by opening new branches, installing new automated teller machines (ATMs) and developing new, technology-based banking platforms across the country.

Setting up new ATMs and opening branches will enhance the banks’ market share in Zimbabwe and put them in a better position to compete against other banks in a country that has more than 20 banks.