Barclays Bank parent company reports 6 percent revenue increase
Absa Group, the parent to Barclays Bank Botswana – soon to be renamed Absa – has reported a six percent increase in its revenue during its half year financial results for the period ending June 2019.
Absa Group operates in 12 African markets, including in Botswana where it controls ownership of the public listed Barclays Bank Botswana.
The group raked in total revenue amounting to 39.1billion Rand, which its Financial Director, Jason Quinn noted they achieved despite the tough operating environment.
Botswana is reportedly in the top five contributors to the group’s revenue.
However, since the local operations are still in closed period, it could not be revealed exactly how much it contributed to the Absa Group revenue.
The group’s subsidiaries outside South Africa, collectively known as Absa Regional Operations (ARO), contributed more than a fifth of its total earnings.
For the period under review, Absa Group’s gross loans and advances for customers increased by 12 percent to R912 billion.
Loans and advances in regional operations increased by 15 percent to R107 billion.
The performance was achieved despite the South African economy contracting by 3.2 percent during the first quarter, believed to be worst quarterly contraction since 2009.
Worse still, economic performances in ARO countries like Botswana were faced with uncertainties and headwinds in the first half of the year.
Botswana, for its part, saw the diamond market slump, while others saw economic activities slow.
Absa executives say this reflects limited fiscal space and drought, which has already been declared in Botswana.
The group has reported that headline inflation in most countries where it operates has remained elevated, driven by weaker currencies and rising food prices.
In the majority of Absa markets, Monetary Policies remained unchanged as countries maintained bank rates, save for Ghana, which cut its interest rates in January.
While Absa has made notable progress in its reorganisation following implementation of its new strategy last year, the group faces headwinds in that South Africa’s economic growth outlook appears muted with GDP anticipated to grow by just 0.5 percent.
The prospects for stronger growth are believed to be constrained by the slowing global economy in addition to weak business sentiment and decelerating household income growth in South Africa.
In the group’s ARO markets, GDP is expected to grow by 5.5 percent and the group has committed to its Return on Equity (RoE) target of 18 – 20 percent in 2021.