Gazette Reporter
Barclays Bank of Botswana’s profit before tax was P 260 million for the 6 months ended 30 June 2018, representing a 4 percent growth year-on-year in comparison to the same period last year. The bank’s MD Reinette van der Merwe says the performance was influenced by “growth in income, contained costs and favourable expected losses”.
Last week, Van Der Merwe said that expected losses remain within risk appetite and the business maintained strong profitability. “On a year-on-year basis our credit expected losses/impairments decreased by 12.3 percent. The performance is attributable to our enhanced collections capability and conservative credit extension to high risk sectors especially in the Retail segment.”
Barclays’ retail banking profitability increased by 60.2 percent year-on-year driven by a notable improvement in expected losses/impairments. Revenue increased by 2.3 percent year-on-year driven mainly by non-interest income which grew by 8.6 percent. “This is in line with the business strategy to grow fee income,” the MD says. Deposits for the segment grew by 3 percent while loan balances increased by 7 percent year-on-year. Van Der Merwe says significant strides have been made in delivering on strategic priorities during the first half of 2018 including the following; Digital New Products and Solutions Network Optimization.
The Business Banking strategy continued to deliver results with a 73 percent year-on-year growth in Profit before Tax (PBT). This growth in profitability, Van Der Merwe was driven mainly by a good impairment performance. Income improved Year-on-Year by 7 percent as a result of growth in Net Interest Income (NII). Barclays says loans registered a strong growth during the period under review.
Operating costs were well contained with the business achieving a cost to income ratio of 53.6 percent for the period ended 30 June 2018. This was driven by our continued focus on spending prudently. Year-on-year costs increased by 6 percent largely as a result of increased technology spend as they embark on the separation journey from Barclays PLC.
“We are excited about the opportunity that the brand name change of our parent company brings as part of our journey towards becoming a truly transformative bank that is modern, fast-thinking and relevant. While we will re-brand to Absa in the near future, our commitment to our employees, customers and communities is stronger than ever before. Our renewed energy will ensure we bring our stakeholders possibilities to life,” Van Der Merwe said.