Maria Ramos-led Barclays Africa has gone some of the way to justify a 43% share price rebound over the past 12 months by posting a double digit bottom line growth for 2014. The R161bn market cap group, whose Absa brand houses South Africa’s largest retail bank, did slightly better than analysts had expected. Its growth is slightly behind the 13% posted last month by competitor Nedbank. – AH
(Bloomberg) — Barclays Africa Group Ltd., the South African lender controlled by Barclays Plc, said 2014 profit rose after it loaned more money to customers and investments grew.
Net income climbed to 13.2 billion rand ($1.13 billion) from 12 billion a year earlier, the Johannesburg-based bank said in a statement on Tuesday. Earnings per share excluding one-time items climbed to 15.38 rand, missing the 15.44 rand median estimate of 14 analysts surveyed by Bloomberg. The total dividend rose 13 percent to 9.25 rand per share.
After buying its parent company’s operations in eight countries on the continent in 2013, Barclays Africa has been standardizing technology across the continent and rolling out its investment banking products. The lender, which lost domestic market share in consumer banking to rivals like FirstRand Ltd., has also been developing products and strategies to lure more customers in its home market.
“With South African interest rates likely to remain low for longer, we do not expect the group’s net interest margin to improve further in 2015, although its loan growth should increase,” the lender said in the statement. “Focus on revenue growth and continued cost management should improve the group’s cost-to-income ratio, while its credit loss ratio has probably troughed. These factors should increase our return on equity in 2015.” – BLOOMBERG
From Reuters
JOHANNESBURG, March 3 (Reuters) – Barclays Africa Group posted a 10 percent rise in full-year earnings on Tuesday, in line with expectations, after booking higher lending income and cutting bad debts.
The African subsidiary of Barclays Plc said diluted headline earnings per share totalled 1,537.5 cents in the year to end-December, from 1,396.6 cents a year earlier.
Analysts had pencilled a 9 percent increase in earnings.
Headline EPS, which excludes certain items, is the main measure of profit in South Africa.
Barclays said net interest income – the measure of income from lending – climbed 10 percent to 35.6 billion rand ($3 billion) while credit impairments contracted 10 percent to 6.3 billion rand.
Non-interest revenue came in 2 percent higher to 27.5 billion rand.
Barclays, South Africa’s third-biggest lender by market value, is the second of the “big four” banks there to report full-year earnings.
Fourth-ranked Nedbank posted a 13 percent rise in earnings last month, boosted by higher lending income and a decrease in bad debts.
Its shares have gained 4.6 percent so far this year, lagging a 5.5 percent rise in the South African banking index. – Reuters
From Barclays Africa
Salient features
- Diluted headline earnings per share (HEPS) increased 10% to 1 537,5 cents.
- Declared a total dividend per share (DPS) of 925 cents, up 13%.
- Rest of Africa headline earnings grew 14% to R2,0 billion and South Africa rose 9% to R11,1 billion.
- Return on equity (RoE) improved to 16,7% from 15,5%.
- Pre-provision profit increased 5% to R27,3 billion.
- Revenue grew 6% to R63,1 billion, as net interest income increased 10% and non-interest income rose 2%, while operating expenses grew 7% to R35,8 billion.
- Credit impairments fell 10% to R6,3 billion, resulting in a 1,02% credit loss ratio from 1,20%.
- Barclays Africa Group Limited’s Common Equity Tier 1 (CET1) of 11,9% remains above regulatory requirements and our Board targets.
Barclays Africa Group Limited (‘Barclays Africa’ or ‘the Group’) has delivered solid financial results for the year ended 31 December 2014 and is on track to deliver on its strategic priorities and financial commitments. The Group today reported a 10% increase in headline earnings to R13 billion from R11,8 billion in 2013 as pre-provision profit rose 5% to R27,3 billion and credit impairments declined by 10% to R6,3 billion.
Maria Ramos, Chief Executive of Barclays Africa Group, says:
“Our strategic execution is on track and we have delivered solid growth in our headline earnings in line with expectations. Demonstrable progress has been made towards meeting our ambitious financial commitments.”
“The Group has never been in a stronger position than it is today. These results clearly show that we have built a solid foundation and that we are building the ‘Go-To’ bank in Africa. We will keep improving our business in South Africa by picking up the pace on turning around RBB while simultaneously driving growth in our Corporate Bank and WIMI franchise across the continent. There is great upside in extracting more value from our existing portfolio so this is our main priority for 2015,” adds Maria Ramos.
The Group declared a 13% higher total ordinary dividend per share of 925 cents given its strong Common Equity Tier 1 (CET1) levels and internal capital generation. This further demonstrates the sustainable returns created for our shareholders, which is also reflected in the Barclays Africa share price, which has appreciated by 47.2% in the past 12 months (to end February), and the R21 billion in dividends declared over the past two years.
During the period under review, Retail and Business Banking’s (RBB) headline earnings increased 9% to R8,3 billion, due largely to lower credit impairments and a strong performance by Business Banking South Africa. Home Loans’ earnings jumped 78% to R1,8 billion as credit impairments fell 51%.
Corporate and Investment Bank’s headline earnings grew 16% to R3,9 billion led by a 24% increase in earnings growth by Corporate. Markets net revenue increased 17% on the back of strong growth in Fixed Income and Credit, Equities and Prime Services. CIB’s South African earnings grew 9% while Rest of Africa increased 38%.
Headline earnings from Wealth, Investment Management and Insurance (WIMI) decreased 3% to R1,4 billion. A decline in headline earnings from the Life Insurance business offset a modest increase in earnings from Wealth and Investment Management and the solid returns produced by Short-term Insurance and Fiduciary Services. WIMI’s headline earnings outside South Africa increased by 36%.
The Group’s earnings remain well diversified by business and product line. RBB accounted for 61% of Group headline earnings (excluding head office, eliminations and other central items) while CIB contributed 29% and WIMI 10%.
