Barclays Africa Group Limited (BAGL) wishes to reiterate that we remain committed to Africa, where we continue to be optimistic about our growth prospects, and to operate in the normal course of business.

UK-based Barclays PLC, which owns 62.3% of Barclays Africa, yesterday said it continues to evaluate its strategic options in relation to its shareholding in Barclays Africa Group Limited and expects to update the market at the time of its 2015 full-year results announcement on 1 March.

Barclays Africa is an independently-listed entity on the Johannesburg Stock Exchange, regulated by the South African Reserve Bank and we are well capitalised with a track record of strong returns.

Maria Ramos, Barclays Africa Group Chief Executive says: “We continue to offer a full and integrated range of products and services to more than 12 million customers in 12 countries across Africa and our customers can be just as confident doing business with us today as they have always been. With an independent board and a separate listing on the Johannesburg Stock Exchange we are deeply rooted in Africa and remain firmly in control of our future.”

In 2013, Barclays Africa was established as a leading African bank when 12 banks across the continent were brought together.

“In doing so, we put the future of this organisation firmly in our own hands,” Ms Ramos said.

Barclays Africa Group Limited is the majority (in some cases sole) shareholder of the BAGL operations in South Africa, Kenya, Botswana, Ghana, Zambia, Mauritius, Mozambique, Seychelles, Uganda and Tanzania (Barclays Bank Tanzania Limited and National Bank of Commerce Limited). Any announcement relating to Barclays PLC’s shareholding in BAGL does not impact the shareholding and ownership of these operations.

“We continue to be optimistic about our prospects in Africa, where we have a strong franchise with assets of over R1 trillion. We are deeply committed to the success of our continent. Our destiny is in Africa,” Ms Ramos says.

Barclays PLC and Barclays Africa Group Limited will announce their 2015 financial results tomorrow.

Salient features

• Diluted headline earnings per share increased 10% to R16.86
• Dividend per share of R10 up 8%.
• Rest of Africa headline earnings grew 17% to R2.3bn and South Africa rose 8% to R12bn.
• Return on Equity improved to 17.0% from 16.7%.
• Pre-provision profit increased 8% to R29.5bn.
• Revenue grew 6% to R67.2bn, as net interest income increased 8% and non-interest income rose 5%, while operating expenses grew 5% to R37.7bn.
• Credit impairments increased 10% to R6.9bn resulting in a 1.05% credit loss ratio from 1.02%.
• Barclays Africa Group Limited’s CET1 ratio of 11.9% remains above regulatory requirements and our board target range.

Barclays Africa Group Limited (‘Barclays Africa’ or ‘the Group’) today announced a 10% increase in headline earnings for the year ended 31 December 2015, delivering a solid performance underpinned by a three-year strategy implemented in 2014.

Maria Ramos, Chief Executive of Barclays Africa Group Limited says: “We delivered solid results, demonstrating that our strategy is working. Our ambition to be Africa’s leading bank remains unchanged. We are a strong, well-capitalised and independently funded business that is uniquely positioned to achieve our goals across the continent.”

Group headline earnings increased to R14.3 billion on the back of increased income while costs remained well managed.

Costs increased by only 5%, even as the group continued to make appropriate investments in our infrastructure to deliver material improvements to our service.

Return on equity improved to 17%, the highest level since 2008 and Barclays Africa is now top three by revenue in four of our five largest markets; that is, South Africa, Botswana, Ghana and Zambia. We are gaining revenue traction in key focus areas across geographies and businesses and we have seen strong loan growth in the right areas.

Retail and Business Banking (RBB), the group’s largest business unit, continued its turnaround and had another strong year with headline earnings growing 14%, playing a key role in driving overall Barclays Africa growth. RBB recorded solid revenue growth and managed costs well. The continued improvement in the quality of the home loans book and a strong collections performance in personal loans resulted in lower credit impairment. RBB’s non-interest income rose 7%.

“We added 855,000 new-to-bank customers in 2015 – an achievement that I am particularly pleased with,” says Ms Ramos. “Our RBB unit continues to make good progress in its turnaround and we have had one of our strongest revenue months on record in January 2016,” Ms Ramos says.

Improvements in the branch network and other channels, supported by investments in mobile and other technologies supported RBB’s progress.

In Corporate and Investment Banking (CIB), headline earnings increased 6% to R3.9 billion. The group’s pan-African strategy is working, with CIB’s business outside of South Africa increasing to now account for 37% of overall earnings, demonstrating that clients are seeing the benefit of the group’s integrated regional presence.

Wealth, Investment Management and Insurance (WIMI) delivered strong growth in headline earnings, increasing 11%. The WIMI offering was expanded into East Africa, with the launch of Barclays Life Assurance Kenya and the acquisition of a controlling stake in First Assurance, which also gives the group scale and presence in Tanzania.

While the commodity downturn and reduced economic growth weakened general sentiment towards the continent, Barclays Africa’s operations in the rest of Africa performed well and enhanced group growth. This shows that creating the Barclays Africa group in 2013 is working.

Revenue from operations outside of South Africa increased to 14% while headline earnings grew 17%. Operations outside of South Africa accounted for just over a fifth of revenue during 2015 and earnings growth in this region should continue to exceed those of South Africa. There is a clear path to increasing return on equity from those operations.

While the focus of the numbers we released today is on financial performance, this is only one component of our success as a business.

Barclays Africa has adopted a Shared Growth approach which for us, means generating a positive impact on society while delivering shareholder value.

Last year, the group launched ReadyToWork in seven countries across Africa and will continue the rollout in 2016. This initiative, helping to bridge the gap between the world of education and the world of work for African youth, is part of a much wider commitment to African society under our shared growth philosophy.

“We are proud to announce today that we will spend R1.4 billion over the next three years as we place increased emphasis on helping to address some of the biggest challenges facing our continent: joblessness, poverty, rising inequality and exclusion from access to education and financial services,” Ms Ramos says. “As Africa prospers, so will we.”

Barclays Africa is systemically important in most of the countries in which we operate and the company makes a significant economic contribution across the continent. In 2015, Barclays Africa paid R7.3 billion in taxes and provided employment for close to 42,000 people. We spent nearly R15 billion supporting more than 5,000 suppliers, including 1,200 small and medium enterprises.

“In conclusion, there is no doubt that the three-year strategy that we embarked on in 2014 has placed us in a stronger position than before to deliver on shareholder expectations and to play a broader role in society,” Ms Ramos says. “In Barclays Africa Group, we have built a strong and resilient franchise.”

An increasingly tough and volatile economic period will impact on the group’s ability to deliver against our targets in the year ahead. In South Africa, Barclays Africa’s largest market, the company expects 0.9% GDP growth this year, with downside risks from drought and electricity shortages.

Our balance sheet is, however, well positioned for this deteriorating macro environment given our highest level of portfolio provisions, our lowest non-performing loans since 2005, and strong capital ratios and liquidity.

In 2013, when Absa acquired the majority of Barclays PLC’s operations in Africa, a leading African bank was created.

“We continue to offer a full and integrated range of products and services to more than 12 million customers in 12 countries across Africa and our customers can be just as confident doing business with us today as they have always been. With an independent board and a separate listing on the Johannesburg Stock Exchange we are deeply rooted in Africa and remain firmly in control of our future,” Ms Ramos says.

“We continue to be optimistic about our prospects in Africa, where we have a strong franchise with assets of over R1 trillion. We are deeply committed to the success of our continent. Our destiny is in Africa,” Ms Ramos says.

• Education and Skills – spend R1.4bn in education and skills development targeting the youth
• Enterprise Development – enable access to affordable finance for SMEs by raising R1.3bn through corporate supply and distribution chains using innovative technology
• Financial Inclusion – enable digital and non-digital access to underserved consumers through real banking and value-add products and services to promote wider convenient access to financial services.

Johannesburg, 4 July 2016 – Barclays Africa today reaffirmed its commitment to economic and socio-economic growth on the continent through its Shared Growth Strategy, pledging (1) R1.4 billion to improve skills development and access to quality education, (2) to raise R1.3bn to help small and medium-sized African businesses succeed and grow, and (3) to ensure that more people have access to digital and non-digital financial services across the continent.

Speaking at a press briefing in Johannesburg, Maria Ramos, Barclays Africa Group Chief Executive said “Shared Growth for us means having a positive impact on society and delivering shareholder value, the two are not mutually exclusive. We are applying our substantial resources to provide innovative commercial products, services and partnerships to build a more equitable and prosperous Africa for the next generation.”

When our customers and clients do well, so do we. When the communities where we live and work thrive, we do too. And when society prospers, we all do. But only if we work together – private public partnerships are the key to tackling some of society’s biggest challenges – to deliver on growth opportunities. “We believe a business can only be successful if it connects positively and creates value with the society in which it operates in,” added Ramos.

Shared value

Shared Growth is based on creating shared value. It emphasises the connections between societal and economic progress, showing that they are mutually dependent, and when unleashed can stimulate substantial growth. Companies can, and indeed should, develop deep links between their business strategies and approach towards citizenship. Similarly in South Africa there is the Kings III which advocates for ensuring business drive an integrated approach to business growth, ensuring there is the triple bottom line

We recognise that there is a virtuous link between society’s progress and our own success, and we therefore continually seek opportunities to be a good corporate citizen, and contribute to the societies in which we operate in a meaningful way.

As part of the Shared Growth Strategy, Barclays Africa today announced the appointment of a Shared Growth Advisory Council. “We realise that making a meaningful contribution to economies and society is about shared value and shared opinion. We are proud to partner with industry leaders, civil society and government who will play a role in ensuring our contributions are meaningful and that our impact is sustainable,” added Ramos.

Performance highlights:

• Headline earnings grew 7% to R7.25bn supported by strong pre-provision profit growth of 19%.
• Diluted headline earnings per share increased 7% to 856.7c.
• Interim dividend per share of 460c.
• Headline earnings in South Africa rose 3% to R5.9bn and rest of Africa rose 33% to R1.3bn.
• Pre-provision profit increased 19.1% to R17bn.
• Revenue grew 13% to R36.5bn as net interest income increased 14% and non-interest income rose 10%, while operating expenses grew 7% to R19.5bn.
• Credit impairments increased 46% to R5.2bn resulting in a 1.29% credit loss ratio up from 0.97%.
• Return on Equity declined marginally to 16.1% from 16.4%.
• Tier 1 Capital (CET1) ratio of 12.1% remains above regulatory requirements and our Board target range.

Barclays Africa Group Limited (“Barclays Africa” or “Group”) today announced strong half-year results for the period ending 30 June 2016, in line with market expectations. These results demonstrate that our strategy continues to deliver and is resilient to the challenging economic environment. We continue to make progress on our commitments.

“Our strategy continues to deliver strong results and is proving resilient in a challenging economic environment. Ours is a proudly African bank deeply committed to Shared Growth across our continent.”

Maria Ramos
Chief Executive, Barclays Africa Group Limited

Summary of results:

Headline earnings increased 7% to R7.25bn supported by strong pre-provision profit growth of 19%. It is important to focus on the core underlying results as Rand weakness added 3% to the Group’s revenue and cost growth.

Revenue grew 13% while a focus on cost management saw operating costs increase only 7% despite ongoing investment in new technologies, people and infrastructure.

The Rest of Africa business continued to grow faster than the South Africa business.

As expected, credit impairments increased due to provisions for single name impairments in the Corporate and Investment Bank, and additional coverage built in the South Africa Home Loans portfolio.

The Group continues to make progress on its commitments.

• Revenue from the Rest of Africa business increased to 23% of total revenue, well within the target range of 20-25%.
• Maintained Top 3 status by revenue in 4 of the 5 largest markets: South Africa, Ghana, Zambia, and Botswana.
• Cost-to-Income ratio improved to 53.4% from 55.9%, showing good progression towards the medium-term target of the low 50s.
• Return on Equity (ROE) of 16.1% which is marginally down over the prior year in line with our guidance, and remains short of the medium-term target of 18-20%.

Although these are strong results there are a number of factors that pose significant downside risks.

In South Africa, business confidence remains weak, and the combination of weak job growth, higher inflation and rising interest rates have placed a strain on consumer finances. GDP growth in South Africa is expected to continue to weaken in 2016 and recover slowly in 2017.

Similarly, average GDP growth in the Rest of Africa presence countries is expected to be the lowest since 2002.

Business Unit Performance Highlights

• The Retail and Business Bank (RBB) franchise continues to deliver strong results. Headline earnings are up 10% on prior year to R4.9bn as pre-provision profit increased by 13%.
  RBB delivered healthy growth in a number of areas. Non-interest income increased 7% as strong Card growth offset moderate transactional revenue growth, and the business saw an increase of 16% in loans in the Rest of Africa.
  As previously noted, impairments are rising across a number of portfolios, notably in South Africa Home Loans.
  The core South Africa Retail franchise added 410k new-to-bank customers in the first half and now serves 8.9 million customers.
• The Corporate and Investment Bank (CIB) made good progress on expanding the Corporate Bank in the Rest of Africa. Headline earnings are up 7% on prior year to R2.0bn supported by strong revenue growth and a 45% increase in pre-provision profit, offset by a material increase in single name impairments and higher portfolio provisions.
  The Rest of Africa now contributes roughly half of total CIB headline earnings in line with the strategy.
  The Rest of Africa Corporate business increased income by 36% supported by strong advances growth, improved margins, and increased transactional volumes.
• The Wealth, Investment Management & Insurance (WIMI) business continued to grow. However, headline earnings are down 8% on prior year to R690mn despite a 13% growth in Life Insurance in South Africa. The decline in earnings is driven primarily by a change in reserving requirements in some markets outside South Africa, and lower market returns.
  WIMI made good progress in growing revenue with net premium income up 19% and fee income up 9%.
  The investment management business continued to win institutional mandates which resulted in R11bn of net inflows during the half.
  In a challenging half year WIMI achieved an ROE of 23% and remains an attractive cash-generative business.

This strong performance in the first half demonstrates the value of a well-diversified Group and positions the business well for sustainable growth going forward.

Shared Growth

In March, Barclays Africa announced its commitment to Shared Growth which is central to the business strategy. Clear and ambitious goals have been set across three pillars:

• Invest R1.4 billion in education and skills development over the next three years.
• Raise R1.3 billion for Small and Medium Enterprise funding this year.
• Offer financial inclusion to half a million people this year.

A number of Shared Growth initiatives have been launched which will accelerate during the rest of the year.

Barclays PLC Divestment

Following their announcement on 1 March, Barclays PLC continues to explore strategic and capital market opportunities to reduce its shareholding in Barclays Africa to achieve regulatory deconsolidation.

The first sale tranche of 12.2% was successfully concluded on 5 May and reduced Barclays PLC’s shareholding to 50.1%.

Barclays Africa continues to work closely with Barclays PLC, including planning for the operational separation of the two businesses in order to preserve value for all stakeholders. Barclay Africa and Barclays PLC continue to engage with regulators as the divestment process is subject to all relevant regulatory approvals.

The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) rose by 3.2 points to reach 49.5 index points in September. The September reading, as well as the average for the third quarter, are below the neutral 50-point mark. In fact, the average reading in the third quarter is well below the second quarter average. This suggests a slowdown in actual quarter-on-quarter manufacturing production growth after a solid performance in the second quarter.

Four out of the five main PMI subcomponents increased in September. Nonetheless, only the business activity and suppliers’ performance indices came in above 50 points. The new sales orders index continued to point to subdued demand. In contrast, the inventories index ticked higher in September and edged back above the level of the new sales orders index. This means that the PMI leading indicator is below one, which does not bode well for output growth going forward. The employment index declined in September and fell below 50 for the first time since June.

On a positive note, the index tracking expected business conditions in six months’ time increased notably to 63.8 points. This was the third straight increase and the index is now at the highest level since the start of 2015. The more upbeat sentiment could be driven by less pressure on costs. Indeed, the price index fell for a third straight month to the lowest level in almost six years.

This is likely driven by the rand exchange rate remaining relatively firm from August to September and two consecutive months of declining fuel prices. In addition, despite of the slightly stronger rand exchange rate of late, respondents still reported higher export orders. On the domestic front, some manufacturers may benefit from an expected turnaround in the agriculture sector as the impact of the drought diminishes.

Barclays Africa Group is pleased to announce the appointment of new agencies to handle its significant business across the continent. Specifically, FCB Africa will handle its corporate, brand, sponsorship, retail and insurance advertising portfolios, and Mortimer Harvey will handle its business to business advertising portfolio.

Barclays Africa offers a full and integrated range of products and services to more than 12 million customers in 12 countries across Africa. We have a strong franchise with assets of over R1 trillion, and are deeply committed to the success of our continent. Partnering with these two renowned agencies, FCB Africa and Mortimer Harvey, is a key step on our journey.

A continent-wide strategic evaluation of over 50 top agencies in Africa informed our decision, overseen by Yardstick who are an independent firm specialising in the provision of measurement and assurance services to the advertising industry. The review included a rigorous internal and external governance process.

Commitment to Africa

Group Executive, Marketing and Corporate Relations, Bobby Malabie, said: “As we continue to focus our business and commitment to Africa, the evolution to a new agency model is critical. Both FCB Africa and Mortimer Harvey demonstrated an impressive understanding of our business requirements and are committed to building a market leading partnership model with us. FCB Africa and Mortimer Harvey boast enviable credentials and awards, and we look forward to building on these together”

“We also saw this as an opportunity to drive a greater focus on transformation in the advertising industry, and our new agencies, FCB Africa and Mortimer Harvey, have demonstrated their commitment in this area. We look forward to engaging further with the broader advertising industry on some of our more specialist requirements to further improve transformation within the industry” he added.

Barclays Africa would also like to thank its incumbent agencies for the long standing and highly valued relationships. Over the last decade the partnerships have achieved both business and creative success.

Applications have opened for the Barclays Accelerator programme, powered by Techstars, an initiative aimed at uncovering the next M-Pesa or Paypal by working with exceptional fintech entrepreneurs innovating Africa’s financial services industry.

This collaboration between Barclays Africa and Techstars offers a game-changing opportunity to 10 qualifying fintech startups, which will take part in a 13-week programme beginning in May next year, based out of the Rise fintech innovation hub in Woodstock, Cape Town.

The Barclays Accelerator first came to Africa at the beginning of this year and was a significant success, with Barclays Africa signing initial collaboration agreements with 7 of the 10 startups that were part of the programme.

Tremendous potential

Yasaman Hadjibashi, leading the innovation agenda for the bank says: “Africa has tremendous untapped potential to not only pioneer its own creative solutions for its unique contexts but to also create solutions that the rest of the world can adopt for their own contexts.”

According to the Disrupt Africa African Startups Funding Report 2015, 29% of investment in African tech startups goes to those focused on fintech, suggesting a substantial opportunity for innovative ventures in the sector.

Selected startups will be given the opportunity to enter or expand their presence in the African marketplace via Barclays Africa Group’s customer, product, and technology teams. Leveraging the global footprint of Rise, the selected startups will also have the chance to scale globally through Rise sites in London, New York, Mumbai, Tel Aviv and Vilnius. The Accelerator offers companies an advantage over others by providing a proven curriculum, and lifelong access to the Techstars global network of mentors, investors and venture capitalists.

Yossi Hasson, Managing Director of Techstars says: “I truly believe that being part of Techstars gives companies such an advantage when it comes to scaling globally. The depth of experience that the Techstars team and global mentor network has in working with and investing in over 900 start-ups is unprecedented for the African continent. The Accelerator pushes for one year’s worth of traction in three months. At the end, your company won’t come out the same, regardless of stage.”

Fintech companies can apply here: https://www.f6s.com/barclaysaccelerator-africa by February 5th, 2017 for this opportunity to take their venture to new heights. If you’d like to find out more, please visit: http://www.barclaysaccelerator.com/#/cape-town/ or contact emily.skinstad@techstars.com

Barclays Africa Group Limited (Barclays Africa) crowned Markit Opportunity the Barclays Africa Supply Chain Challenge champion at a panel submission judging event held at The Bandwidth Barn Accelerator in Cape Town last night. The pan-African challenge, under the Rise in Africa umbrella, which launched in July, invited teams of innovators to submit ideas to redefine the supply chain process and enable economic growth across Africa.

Represented by their CEO and Founder Ashley King-Bischof, Markit Opportunity, from Kenya, triumphed over four other innovative finalists, by demonstrating a scalable solution to improve incomes of smallholder farmers.

Markit Opportunity incentivises regional trade by leveraging mobile technology and logistics to create trusted, transparent and efficient supply chains. The company provides a mobile platform that connects traders in urban markets to farmers with real-time supply and demand statistics, as well as market related pricing.

Judging panel

The judging panel of industry experts including Erik Hersman, CEO of BRCK, Teju Ajani, regional content partnerships lead for YouTube and Ian Merrington, CEO of the Cape Innovation and Technology Initiative vigorously engaged the five finalists as they presented their concepts.

“When it came to selection process, the very high calibre of submissions provided some testing conversations for the judging panel. Today’s finalists are a great reflection of the rich vein of innovation emanating from the African continent,” says Ashley Veasey, CIO, Barclays Africa and judging panel member.

Markit Opportunity will receive $10 000 in support of their venture. In addition the judges were also so impressed by the Nigerian entrepreneur Job Oyebisi, representing Freshmart, that they awarded his idea a special prize of $5 000. The Freshmart App for Provenance will leverage the blockchain, enabling customers to track the provenance – the chronology of the ownership – of the produce they want to purchase.

Mentorship

In addition to their financial support both winners will receive mentorship from a Barclays Africa executive to help them kick-start their venture.

The Barclays Africa Supply Chain Challenge, which closed in September, was the first of several initiatives being extended into Africa through Rise with the aim to spark ideas to drive the digital evolution on the continent. Interested parties are invited to follow @ThinkRiseAfrica and visit http://www.thinkrise.com for information on other Rise initiatives

The Banking Association South Africa (The Banking Association), on behalf of all member banks, unequivocally condemns the xenophobic attacks carried out on people from different countries on the African continent and some Asian countries.

South Africa prides itself on standing at the forefront of promoting Africa as a continent of opportunity, a continent that is ready to receive private sector investment and promote African unity and collaboration. These are all critical to the continent achieving its potential and promoting the role emerging economies such as ours should be playing in global affairs.

South Africa has made significant progress in developing its economy and offers opportunities to citizens from all over the world to contribute to that growth. We need skills and investment to contribute to inclusive growth that benefits our population. Foreign investment and skills from different parts of the world are critical contributors to this. The xenophobic tendencies displayed currently inhibit both the attraction of skills and investment.

The vast majority of people who choose to make South Africa their home, particularly those from Africa and Asia, are productive people who often create small businesses, employ South Africans and introduce innovative business practices that add value to the overall development of enterprise in South Africa.

The South African banking sector condemns the attacks on foreign nationals.

Rise, in partnership with Barclays Africa Group Ltd (Barclays Africa), landed the ‘Collaborative Innovation Winner’ award at the My World of Tomorrow SA Innovation Awards held at the Sandton Convention Centre last night. The awards recognise and celebrate innovative companies and individuals. Rise is a physical and virtual global community for open innovation designed to help shape the future of financial services.

“Globally, Barclays has a rich heritage of innovation. This latest accolade further demonstrates how Barclays Africa is positioned to harness change. Our customers and clients are demanding innovative solutions, and to keep pace and meet their needs, we need to change the way we think and operate. It is with this ethos in mind that we created Rise in Africa,” says Ashley Veasey, Chief Information Officer at Barclays Africa.

In addition to its presence in the virtual environment, Rise currently has physical innovation hubs in London, Manchester and New York. Its first hub in the Southern Hemisphere will open in Cape Town in December.

Over 5 000 start-ups have interacted through the London and Manchester hubs in the first year alone, while more than 20 hackathons have been hosted and in excess of 130 companies have made use of the global sites. Rise Cape Town is set to enable Africans to connect, co-create and scale the next big thing in financial services.

“Africa has the ability to use technology to leapfrog other regions as it is unencumbered by legacy systems and hard infrastructure that is slow to innovate. Rise helps to empower entrepreneurs to accelerate trends that are already dramatically improving lives across the continent,” concluded Veasey.