The group’s local bank, Absa, has been bleeding customers over the past three to five years, losing in the region of a million clients annually. But in the past 12 months, it has shown signs of winning back and adding new ones.
“Our growth strategy is now halfway through a three-year journey and these results demonstrate that it is working. We have done what we said we would by delivering a strong performance, driven primarily by the turnaround of retail and business banking (RBB),” said Maria Ramos, Barclays Africa chief executive. RBB grew headline earnings 17% to R4.7 billion for the interim period, Barclays Africa reported yesterday.
Business banking grew non-interest income 12% to R1.7 billion. Overall, the division’s non-interest income was up 6% to R8.8 billion, 63% of the group’s R13.9 billion total (up 4% from the previous period). Net interest income increased 7% to R18.4 billion. Continued migration to bundled products dampened the growth in non-interest income, Barclays Africa said. Non-interest income from cards was flat, despite a 12% growth in acquiring volumes, with new interchange rules reducing revenue by R74 million in the period.
RBB’s rest of Africa non-interest income rose 9% to R1.2 billion, “driven by increased transaction and card acquiring volumes”. Credit impairments in RBB fell 8% to R3.2 billion, with home loans’ charge decreasing 47% to R285 million, “given improved collections processes and the high quality of new business written in recent years”, the group said.
Non-performing mortgage loans fell 22%, or by R2.7 billion, to R9.5 billion. This offset a 12% rise in vehicle and asset finance (VAF) credit impairments. Gross loans and advances to customers climbed 7% to R674 billion. For the six-month period, the wealth, investment management and insurance cluster grew headline earnings 14% to R751 million, while corporate and investment banking grew headline earnings 3% to R1.9 billion.
Barclays Africa reported an 11% rise in headline earnings to R6.8 billion, “largely due to strong growth in RBB on the back of customer growth”, it said.
Headline earnings in the rest of Africa grew 22% to R1.2 billion, with SA earnings up 8% to R5.5 billion. An ordinary dividend of 450c per share was declared, 13% ahead of the prior period.