Barclays reports lower profit in H1 to June

Chris Muronzi

BARCLAYS Bank Zimbabwe Ltd reported a profit before tax of US$831 000 in the half year to June 2012 after costs rose ahead of income.
This was lower than US$910,000 reported in the same period last year.
In a statement attached to the group’s financial results, the company said underlying costs went up by 14% year-on-year compared to underlying income growth of 13%.
The financial services group said costs included the effect of a number of projects undertaken during the first half whose benefits extend into the second half.
“Increase in specific provisions largely influenced by the timing and magnitude of the growth in the loan portfolio explains the slight decrease in profit before tax,” MD George Guvamatanga said.
The bank said non-funded income — fees and commissions — was US$13,5 million while interest income was US$4,2 million.
Total income was US$17,5 million. The bank registered a profit after tax of US$471,000 for the period, down from U$732,000 in 2011.
“We have made significant strides in pursuit of our strategy which is underpinned by steady growth,” Guvamatanga said.
In the period under review, Barclays advanced loans of U$60, 6 million to the productive sectors of the economy and to some retail customers. This, the group said, represented an increase of 13% from US$53,7million in the previous year.
Barclays said it was committed to growing its loan book in a way that ensured its quality.
The group, however, said it would continue to drive a safe banking model which was underpinned by a robust risk management framework.
“Businesses continue to be affected by power and water shortages which inadvertently result in increased cost of operation as other expensive alternatives are sought and ultimately have an impact in the pricing of products,” Guvamatanga said.
He added that the efforts put in place by the government and regulators to ensure that the banking industry remained stable would show results in the short to medium term.
“While there are a number of macroeconomic challenges that continue to impede the anticipated levels of business growth, I am confident that the solid base we have built overtime, through investments in technology, human capital development and channel enhancements, will enable us to consolidate our growth while weathering the challenges that the environment may present,” said Guvamatenga.