Mozambique: Separation from Barclays takes one-fifth of ABSA 2019 profit

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Mozambique: Separation from Barclays takes one-fifth of ABSA 2019 profit

12:28 CAT | 30 Mar 2020

in file CoM

The net profit of ABSA Mozambique bank was down about one-fifth in 2019 compared to the previous year, mainly due to the separation of Barclays and the change of brand, the institution said during the presentation of results.

Discounting the impact of that operation, the drop is smaller, around 12%, and is due to market conditions, with a significant reduction in interest rates, said Rui Barros, managing director.

“We were still able to increase the volume of business and sales,” the result of strong activity growth.”However, margins are narrower than in the past”.

The reduction in interest rates will have a ‘transversal’ impact on all results in the Mozambican financial system, Rui Barros added.

ABSA was the first bank in Mozambique to present its 2019 results.
Barros said that, despite the reduction in net profit, the institution will have recorded growth rates above the market average, particularly in terms of deposits and credit, which allowed it to sustain performance in a demanding context.

He was satisfied with the financial health of the institution and with the performance achieved in the face of the challenges faced.

ABSA Mozambique declared on Friday a ‘statutory’ net profit (following international reporting standards) of 1.04 billion meticais (€14.2 million) and a ‘normalised’ net profit, i.e. with no impact from the separation of Barclays, of 1.23 billion meticais (€16.8 million).

The bank ended 2019 with a solvency ratio of 20%, above the regulatory minimum of 12%.

In Friday’s presentation, the institution also highlighted the 8.2% growth in total assets, a 32.7% increase in net loans to customers and a 14.7% increase in customer funds, with capital growing 10.3%.

Rui Barros was confident that the Mozambican economy would resume growth after the crisis caused by the Covid-19 pandemic.

After the outbreak broke out in China in December, it spread worldwide, which led the World Health Organisation to declare a pandemic situation.

Absa Bank – the name meaning Amalgamated Banks of South Africa – is based in Johannesburg, was founded in 1991 and in 2013 merged with Barclays African operations, taking on the British brand, in a process reversed five years later.

It is listed on the Johannesburg Stock Exchange with total assets over $91 billion, among the largest financial services groups in Africa.

Source: Lusa