HARARE – Barclays Bank Zimbabwe (BBZ) says operations have continued unaffected after parent company Barclays Plc divested from African operations, with the bank posting a $16 million total income in the four months to April 2016.
BBZ managing director George Guvamatanga on Thursday told an Annual General Meeting in the capital that the group’s operations remained “intact” despite Barclays Plc’s divesture, which left the group reporting under Barclays Non-Core Division.
“The bank is making various improvements in its operations signalling its commitment to the local market,” Guvamatanga said.
The Barclays boss said net interest income for the period, at 24 percent, was also up from the 11 percent recorded prior comparable period.
BBZ posted a growth in net interest income for the four month period to April buoyed by a higher retail loan book compared to the same period last year.
“The total income at $16 million shows improved performance on prior period… Non-funded income also grew year-on-year to eight percent against the one percent recorded in 2015 on the back of an increase in foreign exchange trades and an increase in card transaction volumes,” he said.
This comes as the financial institution’s parent company, Barclays Plc, left Africa after more than 100 years on the continent.
Barclays Plc, last year, attempted to sell the Zimbabwean unit to Barclays Africa (formerly Absa), but talks broke down after the parties could not agree on a price.
However, BancABC Zimbabwe’s parent company, Atlas Mara Plc, is likely to emerge as the front runner to acquire Barclays Plc African assets after confirming it had talks with a group of investors exploring an acquisition of Barclays Plc’s 62 percent stake in Barclays Africa.
Meanwhile, Guvamatanga said the trading environment in the first four months had been difficult on the back of cash shortages and challenges with external transactions.
“Because of this, transactional volumes were down compared with last year and this is creating pressure on business,” Guvamatanga said, adding cost of funds remained flat on prior period.
“Cost to income ratio improved slightly to 81 percent from 88 percent last as cost optimisation initiatives resulted in costs being controlled within budget. Staff cost to operating costs at 54 percent were also lower compared to 59 percent in 2015,” the Barclays chief banker said.
Guvamatanga said the group was still working on its cost to income ratio in order to start generating more income.
In the four months, total asset grew 14 percent to $342 million buoyed by a 19 percent increase in investment securities as well a 53 percent improvement in cash and bank balances which stood at $115 million.