Barclays Africa commits to powering Africa

Barclays Africa Group Ltd (Barclays Africa) today announced it has committed a minimum of US$500 million to a pipeline of proposed clean power projects that form part of the “Power Africa” initiative. This will increase the available power by up to 12 500 MWs in countries that participate in the programme. The aim of the initiative, which was launched last year by US President Barack Obama, is to improve access to electricity on the continent.

Several countries across Africa, including Kenya, Tanzania, Nigeria, Ghana, Liberia and Ethiopia, are taking part in the initiative to improve access to clean, reliable power for about 20 million new households and companies by 2018. According to recent reports, the scale of investment needed to achieve universal energy access in sub-Saharan Africa is about US$15 billion a year, every year through to 2030.

Leading role

Over the past number of years, Barclays Africa has played a leading role as a partner to developers and to other banks on energy projects that span almost all the countries where it has a presence across the continent.

According to Stephen van Coller, Chief Executive of the corporate and investment banking division of Barclays Africa, the company’s extensive experience, gained over many years, positions it well to support the expected growth in the energy sector on the continent. “Barclays Africa has a long-standing reputation in Africa, playing a significant role in realising African governments’ ambitions of sustainable and independent power supply,” says van Coller.

In November last year, Barclays Africa secured mandates to provide ZAR10.8 billion worth of debt funding to a total of six projects, including Wind, Solar PV and Concentrated Solar Power under the South African government’s third Independent Power Producer (IPP) Procurement round. The breadth of projects demonstrates Barclays Africa’s sector expertise. The biggest transaction was the Department of Energy IPP Peakers Power Project which was awarded Africa Power Deal of the Year for 2013 by Project Finance Magazine as well as African Renewable Energy Deal of the Year for 2013 by Project Finance International Magazine.

Focus on leadership

“Our sector focus and leadership demonstrates that we are well positioned to realise our vision of being the ’Go-To‘ corporate and investment bank in Africa,” says Philip Lindop, head of Investment Banking at Barclays Africa. “We expect the energy sector to continue to grow further in the coming decade. Given the need for power on the African continent, combined with increasing knowledge of and experience in how to execute these transactions, we expect that Barclays Africa will remain well positioned to partner with our clients in realising their ambitions,” added Lindop.

Barclays Africa is on track to meet growth commitments, achieves strong financial momentum.

Barclays Africa Group Limited (Barclays Africa) released its interim results on 30 June. The Group is on track to deliver on the ambitious targets laid out at its annual results in February. Financial results for the six months ended 30 June 2014 reflect a 10% increase in headline earnings to R6,1 billion underpinned by strong financial momentum across the business, despite a contraction in South Africa’s GDP in the first quarter of this year.

Salient features

• Diluted headline earnings per share (HEPS) increased 10% to 720,7 cents.
• Headline earnings in SA increased 6% to R5,1 billion and by 34% to R1,0 billion outside of South Africa.
• Barclays Africa Limited acquisition remained earnings enhancing
• Pre-provision profit increased 5% to R13,4 billion.
• Return on equity (RoE) improved to 16,1% from 14,3%.
• Interim ordinary dividend per share (DPS) increased 14% to 400 cents.
• Revenue grew 7% to R30,7 billion as net interest income rose 10% to R17,5 billion.
• Net interest margin improved to 4,56% from 4,45%.
• Non-interest income increased 5% to R13,5 billion and accounted for 44% of total revenue.
• Operating expenses grew 9% to R17,3 billion, increasing the cost-to-income ratio to 56,4% from 55,5%.
• Loans and advances to customers grew 5% to R614,6 billion, while deposits due to customers rose 5% to R597,6 billion.
• Credit impairments declined 7% to R3,6 billion, resulting in a 1,18% credit loss ratio from 1,35%, while coverage on performing loans increased to 70 basis points from 60.
• Non-performing loans (NPLs) improved to 4,6% of gross loans and advances to customers from 5,3%.
• Net asset value (NAV) per share declined 2% to 9 261 cents, due to the R6 billion special dividend paid in November 2013.
• Barclays Africa Group Limited’s Common Equity Tier 1 (CET1) ratio was 11,8%, well above regulatory requirements and our board range.

Barclays Africa Group Limited (Barclays Africa) is on track to deliver on the ambitious targets laid out at its annual results in February. The Group’s financial results for the six months ended 30 June 2014 reflect a 10% increase in headline earnings to R6,1 billion underpinned by strong financial momentum across the business, despite a contraction in South Africa’s GDP in the first quarter of this year. Growth in Barclays Africa’s markets outside South Africa remained resilient, notwithstanding a slowdown in key economies such as Ghana and Zambia.

Maria Ramos, Chief Executive of Barclays Africa Group Limited says: “We have taken the time to develop the right strategy for Barclays Africa and have been very clear that this would take three years to deliver. Our results for the first six months of the year demonstrate the traction we are gaining in executing on this strategy and how well we are progressing towards realising our ambitions on the continent. We are transforming the business in the right areas by executing on our four strategic priorities and are determined to accelerate our momentum even faster.”

In February, Barclays Africa outlined four clear targets to grow the business. These include:

• to be top three by revenue in the Group’s five largest markets by 2016,
• to achieve an ROE in the range of 18-20% in 2015,
• to achieve a cost-to-income ratio in the low 50s by 2016, and
• to achieve a revenue share of 20-25% from outside of South Africa by 2016.

Maria Ramos says: “Six months into our three year strategy, we are exactly where we wanted to be. We have grown our revenues by 7% while our return on equity has improved to 16.1% and we are confident that we can achieve the necessary milestones this year to reach our 18%-20% target.

As expected, our cost-to-income ratio has increased because of the investments we are making to transform the business over the medium term. Growth outside of South Africa has been strong and this portfolio now constitutes 20% of Group revenue which is already within the range we have set as a target for 2016.”

To deliver on our One Africa strategy, Barclays Africa prioritised four strategic areas to execute in 2014 and solid progress has been made on each of these:

• The turnaround programme for the Group’s South African Retail and Business Banking (RBB) franchise, based on simplifying processes, reshaping our branch network and investing heavily in our digital products, is taking effect. Customer numbers have stabilised and the Group has reported growth in important segments like the core middle market and commercial segments. RBB’s headline earnings increased 9% to R3,8 billion largely due to a strong performance from Home Loans as credit impairments declined.
• Investing in corporate banking across the continent is paying dividends. Corporate and Investment Bank recorded a 24% increase in headline earnings to R1 903 million, driven by solid revenue growth across all core business units (corporate revenues increased by 11% and investment bank revenues by 20%) as well as focused cost management.
• Having obtained the license for Barclays Life Assurance Kenya, already early signs of capturing the growth opportunity in our Wealth, Investment Management and Insurance franchise are emerging. While the business reported flat headline earnings of R688m, solid headline earnings growth for Wealth and Investment Management (11%), Short-term Insurance (11%) and Fiduciary Services (24%) were offset by Life insurance earnings and a loss after tax in the Distribution business.
• Barclays Africa has further built out the strength of its management team over the past six months and is investing in talent retention.

Maria Ramos concludes: “By the end of the year I expect that we will have made further progress in the turnaround of our Retail and Business Banking business with a particular focus on our business banking franchise. We will also have significantly advanced the roll-out of our corporate business and completed our next phase of expanding our insurance business into East Africa. If we continue to execute well on our stated priorities, I have no doubt that we will become the ‘Go-To’ Bank in Africa – the destination of choice for customers and clients.”

The Corporate and Investment Banking division of Barclays Africa Group Limited (Barclays Africa), today listed the world’s largest platinum exchange traded fund (ETF), NewPlat, on the Stock Exchange of Mauritius (SEM). 400,000 NewPlat debentures were listed on the SEM.

First listed on the Johannesburg Stock Exchange (JSE) in April 2013, NewPlat provides investors on the SME the opportunity to invest directly in platinum bullion as it tracks the platinum price. Each debenture is equivalent to approximately 1/100th of a fine troy ounce of platinum bullion held in a secure depository on behalf of investors.

NewPlat has approximately R14.2-billion assets under management backed by 28 tonnes of platinum bullion. NewPlat became the most traded platinum ETF in the world – just four months after it first listed.

Widening the choice

“The listing of NewPlat on the SEM will help to further expand the Mauritian investment market by widening the choice of asset classes available to local investors, and by also helping facilitate an increase in liquidity on the SEM,” said Vladimir Nedeljkovic, head of Exchange Traded Products at the Corporate and Investment Banking division of Barclays Africa.

NewPlat’s listing on the SEM follows hot on the heels of the listing of Barclays Africa’s fully backed physical gold bullion ETF, NewGold, in July last year. NewGold is also listed in Botswana, Nigeria and Ghana.

The SEM, however, is the first bourse outside of South Africa to list both NewPlat and NewGold and marks yet a further step in broadening the suite of exchange traded products in African markets, and in helping investors reach their ambition in the right way.

“In rolling out both NewGold and NewPlat across the continent, we endeavour to help people prosper and deepen African investment markets through the provision of greater liquidity,” says Nedeljkovic.

Exciting and vibrant platforms

“As Barclays Africa, we believe that African bourses provide exciting and vibrant platforms for our innovative and pioneering exchange traded products. Furthermore, we are delighted to bring world class financial products to local investors at competitive rates.”

ETFs are among the fastest growing investment funds in major markets across the world. In the case of NewPlat or NewGold they offer a low risk route to investing in physical metal without incurring the risks associated with mining the metal posed by equity investments. In addition, ETFs are attractive because of their low costs, tax efficiency and stock-like features.

Barclays Africa’s exchange traded products team was recently ranked first in the ETF category in the 2013 Risk South Africa Rankings survey.

Barclays Africa named ‘Best Investment Bank’ and ‘Best M&A House in Africa’ at Prestigious 2014 Euromoney Awards

Group Also awarded ‘Best Bank In Ghana’

Barclays Africa has been named “Best Investment Bank in Africa” and “Best M&A House in Africa” by the prestigious global news publication Euromoney. The awards ceremony, held at London’s Natural History Museum on Thursday, 10 July, added to a series of recent accolades confirming Barclays Africa as the leading adviser on debt access and business acquisition on the continent.

The Euromoney Awards for Excellence are given each year to honour those institutions that have brought the highest levels of service, innovation and expertise to their customers and industries. The awards are widely considered the most prestigious recognition in the financial services industry.

The award for ‘Best Bank in Ghana’ follows recent recognition as ‘Best Bank in Cash Management’ by Euromoney in 2010 and ‘Best Bank in Ghana’ by The Banker in 2012.
“Less than one year after establishing Barclays Africa, these awards symbolise an important milestone in our journey to achieve our ambition becoming the ‘Go-To’ bank in Africa,” said Maria Ramos, Chief Executive Officer of Barclays Africa Group. “This recognition is a testament to the powerful combination of deep local presence and global expertise that only Barclays can provide on the African continent.”

High-profile transactions

Barclays Africa has been involved in some of the most high-profile transactions on the African continent in the past 12 months. These include acting as joint bookrunner on Steinhoff International’s Є465m convertible bond, sole bookrunner on Metair’s ZAR1.5bn capital increase and sole bookrunner on the ZAR321m accelerated placing of Gold Fields’ residual stake in Northam Platinum. Barclays’ ECM team also acted as joint adviser and sole sponsor on Glencore’s inward listing on the JSE – the largest listing on the JSE in over ten years.

“We are honoured to be recognised as the best investment bank in Africa and best M&A house in Africa. This recognition confirms our leadership position as Africa’s premier M&A, equity, debt, ratings, project finance, risk solutions and foreign exchange adviser,” said Stephen van Coller, Chief Executive Officer of the Corporate and Investment Banking division of Barclays Africa. “You can expect to see continued innovation and investment in this business over the coming years as we extend our product offering into new markets across Africa.”

He believes that Barclays Africa’s unique product capability across financing, risk management advisory, combined with its global integrated investment banking platform, delivers world-class investment banking services to its clients across Africa and played a role in winning the award.

“Our clients are the visionaries, and we are proud that as one of only a few banks that can provide debt financing locally and internationally, delivering multi-product, bespoke financing and advisory solutions that we can help our clients realise their ambitions,” said Philip Lindop, head of Investment Banking at Barclays Africa.

Making strides

Barclays Ghana Managing Director Patience Akyianu, who was in attendance to receive the award, said the recognition was testimony of the strides the bank is making towards the goal of becoming the bank of choice by delivering better value banking to the Ghana market.

“This Euromoney Award for Excellence recognises our enhanced value proposition to our customers through the introduction of innovative products and services that provide easy banking solutions,” said Ms Akyianu.

Barclays Ghana has operated in Ghana for over 95 years and has an extensive retail and corporate banking network across the country; comprising 58 branches, five Agencies, 10 Premier Life Centres, two Premier Suites and eight Local Business Centres. Barclays also has 137 ATMs spread across the country.

Barclays Ghana continues to benefit from investments made in previous years, which has seen the bank post steady growth since 2012. The bank’s impressive performance is underpinned by numerous initiatives, including significant enhancement of customer service experience as well as improved operational efficiencies and control environment.

Youth unemployment is an important issue all around the world, particularly in Zambia where more than half the population is under 20 years old.

Young Zambians want to become more economically independent and want to have the skills and resources to achieve their ambitions, and Barclays has a range of initiatives aimed at supporting them.

The southern African country is the only one on the continent where all three of our global community investment programmes are being delivered: Banking on Change, Barclays Spaces for Sports, and Building Young Futures.

Through 5 Million Young Futures, we have committed to invest not only our money, but our colleagues’ time and expertise in community programmes that enhance the enterprise, employability and financial skills of disadvantaged young people. We want to support five million young people by 2015.

Banking on Change

Over 60% of Zambians have no access to formal financial services. Banking on Change – a partnership between Barclays, CARE International UK and Plan UK – aims to change that by breaking down barriers to financial inclusion for people living on less than US$2 a day.

Raphael Tembo – who lives in the Chimbobo district around two hours north of the capital Lusaka – is just one of the young people learning to save and manage their money through the programme. With the skills he has learnt, Raphael has saved to grow his welding and piggery businesses, enabling him to provide greater security for himself and his mother when times are hard.

Before Banking on Change, Raphael lacked the skills he needed and used to run his business “idly”. Now he has new goals and a business plan: he hopes to attend college to study metalwork, and move from his welding bench on the side of the main road through his village to his own welding shop. Raphael coordinates a savings group for young people in his community and aspires to open a bank account in the future.

Barclays Spaces for Sports

At the Barclays Sports Centre in Lusaka, charity Grassroot Soccer is harnessing Zambians’ passion for football to give young people the confidence and skills to get into employment, education or training. Many participants progress through the training and become coaches who mentor other young people and give back to their local communities.

Aaron Kapoma is one young coach who has found employment thanks to Grassroot soccer. He gained crucial interview skills through the programme, as well as the communication and people skills that have helped him in his new job in local government.

Barclays volunteers also support participants by delivering training to help them improve their financial and employability skills.

Building Young Futures

At Mtendere market just outside of Lusaka, Nsamwa Daka leads a group of women who run a small catering business.

Nsamwa once battled with drugs and alcohol, but she is now not only a budding entrepreneur but a true role model for the women in her community. Many of the women are survivors of domestic violence, and the kitchen provides them with a safe environment, food and source of income. Nsamwa received business training and mentoring from our Building Young Futures partnership with UNICEF, which provides young people with the skills they need to start their own business or get a job.

“My dream is to empower every one of the women going through the programme to start their own business,” said Nsamwa

Down the road from Nsamwa, Morris Siwakwi and Dainess Kabaso have set up their own tailoring business. Before the training they were both unemployed. When they first started, they worked outside making products on the street. They now work from their own shop, and have ambitious plans to expand and employ more people.

The business not only allows them to afford the basic things in life, but Morris is using the profits to send his brother to school. Dainess is excited about what the futures holds: “If you come back in one year I think you will see that we are a very big business – even too big for this store.”

The power of collaboration

Citizenship is as much about the impact we have through our products, services and day-to-day decisions, as it is about investing in communities. Zambia is home to the Barclays-GSK Partnership, which aims to increase access to affordable healthcare and medicines, while creating improved economic conditions for growth.

The partnership is investing £7m over three years to help remove financial barriers to healthcare access while supporting small business development and job creation. Using the resources and expertise of both organisations, our goal is to establish a mode that can be replicated across Africa.

To find out more about Citizenship at Barclays, and how we live our Values in countries around the world, visit our Citizenship page.

Beijing/Hong Kong, 26 March, 2014 – Barclays Group (“Barclays”) and China Development Bank Corporation (“CDB”) announced the signing of a Memorandum of Understanding on Strategic Cooperation in respect of business activities (the “MOU”).

The MOU, signed in Beijing, China, replaces prior memoranda of understanding entered into since 2007. This MOU defines the cooperation framework and scope for CDB and Barclays to complement each other’s capabilities globally in the areas of training and development, corporate and investment banking, retail and business banking, as well as to partner with each other in relation to business opportunities in Africa.

The signing ceremony held in Beijing was presided over by Hu Huaibang, Chairman of CDB, and Sir David Walker, Barclays Group Chairman.

Commenting on the signing of the MOU, Sir David Walker, Chairman of Barclays, said, “CDB has been a valuable partner of Barclays since 2007. The signed MOU reflects changes that have taken place in both CDB and Barclays since 2007, and provides a more relevant framework that will further strengthen the strategic relationship between both organisations.” He further added that, “As Barclays continues its journey to become the ‘Go-To’ bank, we look forward to the next stage of cooperation with CDB globally.”

Barclays and CDB International, CDB’s Hong Kong based investment arm, have also signed a separate memorandum of understanding in relation to investment opportunities for CDB outside of China.

The coveted Barclays Premier League Trophy was the centre of attention in Khayelitsha’s Football for Hope Centre near Cape Town today as Barclays reaffirmed its financial commitment to the Grassroot Soccer (GRS) South Africa Coach Development Programme run in conjunction with Barclays Spaces for Sports.

The programme, delivered for Barclays by Grassroots Soccer, goes far beyond the fields of football. Over 190 GRS coaches between the ages of 18 and 30, who worked with over 39 000 youth in their communities in 2013, have been empowered through training focused on employability and financial literacy skills over the past year. The aim of the project is to encourage all people to live healthy and productive lives through the medium of sport and to embody good citizenship in their respective communities.

Hands-on experience

The Grassroot Soccer development courses are enhanced by additional hands-on experience as well as offering mentoring and voluntary apprenticeships. Khayelitsha has been one of the successful areas of the programme, with 35 of the 190 coach intake over the past year, hailing from this community in the Western Cape.

Bafana Bafana legend that played for Bolton Wanderers and Charlton Athletic during his playing career in the Barclays Premier League, Mark Fish, accompanied the Barclays Premier League trophy to inspire those present.

Said Fish: “Good citizenship should be a part of everyday life and it is key that people understand the importance of life skills such as entrepreneurship and financial literacy. Even footballers can’t play football forever, and it is crucial to have some sort of business acumen to fall back on when one’s playing days are over. Barclays needs to be commended for taking this empowering step towards creating a brighter future and for striving to make a difference in communities through this programme.”

Barclays Spaces for Sports

Chris Barkley, Grassroot Soccer Director of Business Development & Strategy said: “From a Grassroot Soccer perspective, we are very grateful for the support Barclays provides this project both here in South Africa as well as in Zambia and Zimbabwe. We have no doubt that the fruits of this success story will see many of these people put through the programme, going on to take advantage of high-level employment or educational opportunities in the near future.”

The programme, funded by Barclays through the Barclays Spaces for Sports programme, has made a positive and meaningful impact over the past 12 months, according to Gideon Serfontein, Head of Citizenship at Barclays Africa.

“Our community investment will continue to focus on helping to create sustainable local communities in which people are empowered to shape a positive future for themselves and their families, and are able to make a meaningful contribution to their local economy. In doing so, we partner with public benefit organisations such as Grassroot Soccer that achieve development goals through viable, innovative and sustainable skills programmes, thus allowing communities to prosper.”

Absa Adviser Academy today marks a historic milestone as it has attracted the biggest intake to date of Millennium Financial Advisers who have undergone an extensive selection process for the trainee adviser programme in 2014.

The trainees have come from all over South Africa and will join the Adviser Academy in Johannesburg, where they will embark on a structured learning programme which incorporates all aspects of both legal and technical skills, soft skills, business acumen as well as a professional qualification that will enable them to perform the role of a financial adviser.

The Absa Adviser Academy offers candidates an opportunity to push themselves into a high performing and rewarding career that enables them to gain substantial theoretical and practical experience and to acquire scarce and critical skills needed for financial planning.

The Academy has a team of professional development managers and trainers, who possess extensive financial planning skills; knowledge and industry experience, and will coach and mentor the Millennium Advisers in all key aspects to ensure the proper training and development of high calibre financial advisers.

Willie Lategan, Chief Executive of Wealth Investment Management and Insurance said: “By incubating a high calibre of Millennium Advisers, we are working towards being the “Go-To” bank in Africa. Our training programme explains the important role that the Barclays purpose,

Banking on Change, a partnership between Barclays and the charities Plan and CARE International, is calling for the development of international principles to help the 2.5 billion people with no access to formal financial services.

Linking informal savings to formal banking creates both social and commercial benefits. It has the potential to transform the lives of vulnerable and disadvantaged people, while at the same time, enabling us to support more customers and grow our business.

Antony Jenkins, Group Chief Executive

Since 2009, Banking on Change has used a savings-led approach to financial inclusion that has already opened up access to basic financial services to over half a million people. It is the first partnership between a global bank and international NGOs to successfully link informal savings groups to the formal banking sector.

Recognising that to scale up financial inclusion, many organisations will need to work together, the partnership is calling on other individuals and institutions to engage in the development of a set of international principles, the ‘Linking for Change’ Charter.

The draft charter builds on the experiences of, and lessons learned through Banking on Change over the last four years. Following this dialogue, we plan to build an Alliance of 100 leading organisations who will support the principles and can help develop new savings products for poor communities in the developing world.

Today 2.5 billion people still lack access to formal financial services. With the right support, these people could save US$145bn1 a year. Extending formal banking services to the world’s poorest communities will improve their quality of life through increases in household income, investments in micro-enterprises, and spending on healthcare and education.

Banking on Change is central to Barclays’ wider Citizenship commitment to change 5 Million Young Futures, by 2015, by investing in community activities that enhance the enterprise, employability and financial skills of the next generation.

The Linking for Change Charter is the focus of a discussion at the World Economic Forum in Davos during a breakfast event hosted by Barclays Group Chief Executive.

Leading the discussion to develop the Charter, Group Chief Executive, Antony Jenkins commented: “Linking informal savings to formal banking creates both social and commercial benefits. It has the potential to transform the lives of vulnerable and disadvantaged people, while at the same time, enabling us to support more customers and grow our business.”

“However, one of the most significant things we’ve learnt from this partnership is that we can’t fulfil the scale of this ambition alone. We need further collaboration between banks, NGOs, governments and technology providers. That’s why we’re calling for input and support to establish international principles for savings-led financial inclusion.”

Dr. Helene Gayle, President and CEO of CARE USA, added: “The Linking for Change Charter gets back to basics about responsible banking for the world’s poorest people.”
“Only 37% of women in poor countries have access to basic financial services, savings, credit or insurance. Basic access to finance creates incredible gains for women by increasing household income and boosting confidence and dignity.”

“The Charter has huge potential. It’s an opportunity for banks to tap into a huge pool of potential economically active customers, worth an estimated US$145bn.”

Nigel Chapman, CEO of Plan International, said: “Here at Plan, we recently reached the one million members mark for our savings groups worldwide. Banking on Change, our partnership with Barclays and CARE, has been a vital and flagship project. We believe that young people must have better access to trusted financial services if they are to develop, but with so many people still lacking access to banking solutions, it is a problem that we must solve together. That’s why we are calling on others to support our joint vision for the Linking for Change Charter.”

Find out more about the Linking on Change Charter and Banking on Change