Barclays profits on the rise
The board of directors at Barclays Bank Botswana, will not renew the employment contract of Managing Director (MD) Reinette van der Merwe. The current MD’s contract expires end of November this year, this publication has established through two separate sources.
The board is looking to localize the position which has been held by a non-Motswana for the past five years.
Taking over from Aupa Monyatsi, who held the position as an interim MD, Reinette’s appointment was effective November 18th, 2013. Sources reveal that van der Merwe’s appointment was specifically aimed at saving Barclays Botswana, which experienced increasing financial pressures under the leadership of former MDs Wilfred Mpai and Thulisizwe Johnson who left their positions.
Minister of Finance and Economic Development, Kenneth Matambo informed Parliament last year van der Merwe was redeployed from the regional group Head Office with a specific mandate to stabilise the situation at the local bank. The redeployment was necessitated by the resignations of both her immediate citizen predecessors in 2010 and 2012 respectively.
“The current MD of Barclays Bank of Botswana was appointed on a five-year contract effective September 2013 and it is therefore due to expire in 2018,” Matambo said. According to the two separate sources interviewed by this publication, the board of Barclays believes that the MD has achieved the objective of stabilizing the bank and increased shareholder value, and that it was time to make way for a local CEO.
Responding to a media enquiry, spokesperson for Barclays Spencer Moreri said that he was not in a position to divulge employee contractual statuses with the media until Board communication has been availed to that effect.
In 2010 the bank was valued at P4.6 billion before upping its market value significantly to P5.8 billion in 2011. During the same period the bank experienced the loss of two of its managing directors in quick succession causing a loss in public trust. Called in to address the waning public confidence, Van der Merwe took over Barclays at a time when Market Capitalisation had taken a nosedive and settled at an estimated P3.5 billion.
The bank had managed to plug its floundering capitalization a few years prior, when it was dogged by controversy and lost over P2 billion in Market Capitalisation. By 2010 Barclays, had recovered to a valued at P4.6 billion before upping its market value significantly to P5.8 billion in 2011. Despite the intermediate recovery, Barclays’ capitalisation subsequently went on a freefall, while other banks recovered and climbed up the profitability ladder.
In 2012, profits dropped to P450 million. Market Capitalisation fell from P5.8 billion in 2011 to P5.5 billion in 2012, before taking a steep decline to P3.5 billion in 2013. Profitability also declined significantly to P295 million. In 2014, the bank’s profits were recorded as P335 million and a further P260 million in 2015. Interestingly, despite its lower profits, Barclays market share rose from P3.5 billion to P3.9 billion.
In 2016 under Van der Merwe’s leadership, profits also grew 49 percent to P389 million. By the 2017 full year, Barclays had made over P432 million as profit. Barclays is currently valued at P5.1 billion in market Capitalisation, and it is the second most valuable company on Botswana Stock Exchange (BSE) after banking behemoth, First National Bank Botswana (FNBB).
Under the Van der Merwe leadership, Barclays launched a five-year strategy and embarked on a journey to transform the bank’s operations. 2014 was the first year in which the strategy took effect. The transformation programme had three components: Turnaround, Return to Acceptable Numbers and Sustainable Forward Momentum, according to the Bank’s public records.
Van Der Merwe has been paid well for her efforts.
She walked away with P5, 493 million in 2015, in stark contrast to the P2, 256 million remuneration in 2014. Assuming the figures exclude bonuses, it would mean that Barclays Bank forked out P457 750 every month to pay for Merwe’s services in 2015, using the bank’s 2016 annual report as a guide. In comparison, her remuneration for 2014, according to calculations, squat at P187 750 each month.
In 2017, Barclays paid van der Merwe P5. 381 million, which translates to P448 416 every month.