Barclays posts US$1,7m half year profit

LISTED foreign-owned bank Barclays Bank of Zimbabwe (Barclays) has reported a US$1,7 million after tax profit in the first-half of 2014, up from US$800 000 reported in the same period prior year premised on a 9% income growth reporting period, management said.

Kudzai Kuwaza

In a results statement for the six months ended June 30 2014, Barclays MD George Guvamatanga said the performance was against a back drop of interest yields trending down and transaction activity being subdued.

He said the company managed to contain costs increases within 2% following a vigorous cost-cutting initiative.

“Our loan book grew by 14% year-on-year as we extended facilities to businesses and individuals across most sectors of the economy,” said Guvamatanga.

This followed Guvamatanga’s February 2014 speech at the company’s 2013 annual results the bank planned to grow its loan book into the future.

At the time, Barclays had just received US$40 million in offshore funding from its parent company, Barclays Bank Plc. The US$40 million came as the financial institution increased its risk appetite within the confines of its safe banking model.

However, from December 2013, the Barclays’ loan book slid 4%, reflecting some seasonal trend on facility utilisation by customers, according to the Barclays MD. He added several initiatives being pursued in the second-half of the year to further enhance e-channels and to sustain growth in loans.

The bank’s deposits also grew by 3% to US$238 million in the first-half of 2014 compared to the same period prior year.
“Compared to December 2013, deposits came down by 4%, largely reflecting the seasonal nature of part of the deposit base.”

Barclays chairman Anthony Mandiwanza said the bank’s half year profit resulted in a basic earning share of 0,08 cents for the period, representing a 106% growth in net profit compared to the same period last year.

Mandiwanza said the bank has met the current capital requirements for the period, registering a capital adequacy ratio of 17% ahead of the regulatory minimum of 12%. He said the bank has submitted its proposals to the Reserve Bank of Zimbabwe in respect of the minimum capital threshold of US$100 million applicable from 2020.
Mandiwanza said the company is encouraged by government’s promise to maintain the multi-currency regime.

“We are encouraged by the reaffirmation by authorities that the multi-currency system will be sustained.”

He said “We also trust that efforts are underway to demonstrate policy clarity and consistency will be sustained in order to promote growth in long-term investment by locals and foreigners alike.”

Mindiwanza’s statements come as bankers Association of Zimbabwe president Sam Malaba told a Confederation of Zimbabwe Industries conference the country should not reintroduce its local currency until the public regains trust in the national currency.

“An early re-introduction of the local currency is certain to cause panic withdrawal of all US dollar deposits — a stampede that will occasion a banking sector crisis and an economy-wide meltdown will ensue,” Malaba said last week.

Mandiwanza said Barclays shareholders will not get a dividend for the first-half of the 2014 financial year as the bank seeks to increase its capital base.

“The bank is on a growth trajectory and seeks to continue to build momentum,” Mandiwanza said.

“This creates the need to increase the capital base in order to support further growth. Pursuant to this, the bank does not propose a dividend for the period under review.”

2 thoughts on “Barclays posts US$1,7m half year profit”

  1. fivestar says:

    BOREHOLES & IRRIGATION – LOW COST LONG WARRANTY

    0773 528 045
    0715 415 931
    0737 618 376
    ………………

  2. Mushandi says:

    National bank makes a profit of only $1.7 million?

Comments are closed.

Top