Barclays profit jumps 49%

Barclays bank of Botswana’s revenue surged in the first half of the year withstanding tough business climate to record a massive 49% jump in the profit before tax to stand at P387 million.

The bank recognised a steady growth in income across the business segments relative to the previous year. Managing Director, Keabetswe Pheko-Moshagane said the perfomance has been influenced by growth in income, contained costs and favourable credit losses.

Pheko-Moshagane emphasised through the bank’s new strategy that was launched last year it was anticipated that it will help in regaining and grow market share in its core businesses.

“Our purpose is to connect our clients to products and services that bring possibilities to life in Botswana. There has been some significant progress in our strategy to see the benefits. There is still yet more work to be done before we can reach our growth, returns and cost targets,’’ she said.

She remained optimistic going forward that despite the challenging environment that encompasses of strong competition in the ever growing bank sector, the bank will remain strong.

Looking in depth, she said, there has been many positive underlying trends which propelled the bank’s growth with new innovations contributing a lot.

“Our ambition is to become a business which is digitally led, digitally capable and scalable. This is fundamental to our future success; therefore we have intensified our drive to make sure that our clients and customers continuously use our digital platforms,” said delighted Pheko-Moshagane.

The Net interest income went up by 8 % year-on year, total income realised was up 9%, cost to income ratio controlled at 53%, customer assets 12% up and had a strong return on equity of 12 % as well.

Barclays’s total revenue is also up year-on-year by P67 million, boosted by a balance sheet growth or an increase the fees and commission income that went up 5% year-on-year too.

Net interest income increased by 8%, mainly driven by a buoyant balance sheet growth as the business remained resilient in its selected markets continuing to drive credit growth.

She reiterated the bank’s commitment of spending in technology to in pursuit of building a customer centric digital led bank to offer customer convenient banking.

She cited the Bulk Mobile Disbursement as the latest example of the latest innovative product launched in June this year, tailored for giving corporate clients the convenience of making bulk payments to Orange Money and MyZaka wallets.

Chief Financial Officer at Barclays Mumba Kalifungwa said the bank’s positive financial perfomance is due to venturing into new opportunities in a competitive growing banking space. 

He noted that the 49% profit increase is driven by a good revenue increase across the business segments, but he said the bank was concerned that the second quarter of the year will comprise of slow economic growth.

Key risks to growth amongst others include a weaker global environment and continued US-China trade tensions, a move which has resulted in the global demands for diamonds declining significantly.

Moreover, severe drought also poses a big threat to water–dependent manufacturing industries and could culminate in an increase in food prices due to decline in farm output. The bank also projects that the outlook for the non-mining sector is also uncertain.