BARCLAYS Africa said growth in the rest of Africa outstripped South Africa in the first quarter, and it expected that trend to continue.
It expects its credit loss ratio to increase, with arrears on the rise, reflecting the pressure on consumers as economic growth in SA slows.
British parent Barclays reported first-quarter results on Wednesday, a holiday in SA.
Barclays Africa — in which Barclays is reducing its stake — said in a Sens statement on Thursday that it was continuing "to explore opportunities to reduce our shareholding to a level that achieves regulatory deconsolidation".
The parent was first reported to be selling down its 62% stake in the African operation in February.
Former Barclays CEO Bob Diamond has confirmed he is interested in buying the parent company’s stake in Barclays Africa. Mr Diamond’s company, Atlas Merchant Capital, has formed a consortium that includes pan-African investment company Mara Group and, reportedly, US equity group Carlyle to bid for the stake.
Trends persist
Barclays Africa said in Thursday’s Sens statement that the operating trends seen in 2015 persisted.
"Our revenue momentum continued to improve and growth in the rest of Africa remained well above SA.
"Net interest income growth reflected a wider margin and high-single-digit loan growth, while the weaker rand remained a noticeable feature during the quarter.
"Our net interest margin increased due to higher interest rates in several markets, including SA."
The South African Reserve Bank raised the repo rate by 25 basis points to 7% in March, after an increase of 50 basis points to 6.75% in January.
Barclays Africa said loan growth in the corporate and investment banking division continued to exceed retail and business banking.
It reiterated previous guidance for 2016, despite cutting its forecasts for economic growth in SA and elsewhere.
"We continue to expect low-single-digit loan growth, with rest of Africa growing faster than SA," it said. "Our net interest margin should decline slightly, as a higher proportion of corporate and investment bank lending, a reduced contribution from our structural hedging programme and the introduction of lower National Credit Act caps in May, should offset the endowment benefit of higher interest rates.
"Our credit loss ratio is expected to increase, as arrears are rising and we believe nonperforming loans have bottomed.
"However, continued focus on growing revenue and managing costs should improve our cost to income ratio further, and return on equity is likely to be similar to 2015’s."
It expects its credit loss ratio to increase, with arrears on the rise, reflecting the pressure on consumers as economic growth in SA slows.
British parent Barclays reported first-quarter results on Wednesday, a holiday in SA.
Barclays Africa — in which Barclays is reducing its stake — said in a Sens statement on Thursday that it was continuing "to explore opportunities to reduce our shareholding to a level that achieves regulatory deconsolidation".
The parent was first reported to be selling down its 62% stake in the African operation in February.
Former Barclays CEO Bob Diamond has confirmed he is interested in buying the parent company’s stake in Barclays Africa. Mr Diamond’s company, Atlas Merchant Capital, has formed a consortium that includes pan-African investment company Mara Group and, reportedly, US equity group Carlyle to bid for the stake.
Trends persist
Barclays Africa said in Thursday’s Sens statement that the operating trends seen in 2015 persisted.
"Our revenue momentum continued to improve and growth in the rest of Africa remained well above SA.
"Net interest income growth reflected a wider margin and high-single-digit loan growth, while the weaker rand remained a noticeable feature during the quarter.
"Our net interest margin increased due to higher interest rates in several markets, including SA."
The South African Reserve Bank raised the repo rate by 25 basis points to 7% in March, after an increase of 50 basis points to 6.75% in January.
Barclays Africa said loan growth in the corporate and investment banking division continued to exceed retail and business banking.
It reiterated previous guidance for 2016, despite cutting its forecasts for economic growth in SA and elsewhere.
"We continue to expect low-single-digit loan growth, with rest of Africa growing faster than SA," it said. "Our net interest margin should decline slightly, as a higher proportion of corporate and investment bank lending, a reduced contribution from our structural hedging programme and the introduction of lower National Credit Act caps in May, should offset the endowment benefit of higher interest rates.
"Our credit loss ratio is expected to increase, as arrears are rising and we believe nonperforming loans have bottomed.
"However, continued focus on growing revenue and managing costs should improve our cost to income ratio further, and return on equity is likely to be similar to 2015’s."
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