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BGA - Reference to Barclays PLC Quarter 1 2016 Results Announcement
BARCLAYS AFRICA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1986/003934/06)
ISIN: ZAE000174124
JSE share code: BGA
("Barclays Africa Group" or the "Group")
REFERENCE TO BARCLAYS PLC QUARTER 1 2016 RESULTS ANNOUNCEMENT
Barclays Africa Group shareholders are advised that Barclays PLC released its first quarter 2016 results
yesterday, a public holiday in South Africa.
Barclays PLC disclosed pound sterling results for an African Banking segment, which includes Barclays
Africa Group and various cost overlays, consolidation and other adjustments. Barclays PLC provided a
view of the performance for the three months ended 31 March 2016, which maintained a number of
operating trends that Barclays Africa Group showed in 2015.
Our revenue momentum continued to improve and growth in the rest of Africa remained well above South
Africa. 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 South Africa. Corporate and Investment Bank (CIB)
loan growth continued to exceed Retail and Business Banking (RBB). Revenue growth remains solid in
target areas, including Retail Banking South Africa, Markets in the rest of Africa, Corporate, Card
acquiring and Wealth, Investment Management and Insurance, particularly outside South Africa.
Pre-provision profit growth remained robust, as our revenue growth exceeded the growth in operating
expenses, which continue to be well managed. This further improved our cost to income ratio.
Although our non-performing loans were flat year to date, our credit loss ratio increased noticeably, due to
higher portfolio provisions and increased impairments in the rest of Africa, CIB and Business Banking
South Africa. Consequently, our first quarter return on equity was marginally below a high base in the first
quarter 2015.
Despite further reducing our economic growth expectations for South Africa and our other markets, we
reiterate our 2016 guidance. We continue to expect low single digit loan growth, with rest of Africa
growing faster than South Africa. Our net interest margin should decline slightly, as a higher proportion of
CIB 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 NPLs have bottomed. However,
continued focus on growing revenue and managing costs should improve our cost to income ratio further,
and our return on equity is likely to be similar to 2015’s.
The financial information on which this trading update is based has not been reviewed or reported on by
the Group’s auditors.
Barclays PLC’s results announcement also contained the following statement regarding its proposed sell
down of its shareholding in Barclays Africa Group Limited:
“On Africa, we continue to explore opportunities to reduce our shareholding to a level that achieves
regulatory deconsolidation, including capital market and strategic options, and we are pleased with the
level of indicative interest in what is a high quality business. Barclays Africa is an important partner, and
we are working closely with local management, including on the planning for the operational separation of
the two businesses, in a way that will preserve value for shareholders in both Groups.”
Johannesburg
28 April 2016
Enquiries:
Alan Hartdegen
Head: Investor Relations
Alan.Hartdegen@barclaysafrica.com
Tel: +27 (0)11 350 2598
Independent lead sponsor to Barclays Africa Group:
J.P. Morgan Equities South Africa Proprietary Limited
Joint sponsor to Barclays Africa Group:
Corporate and Investment Banking, a division of Absa Bank Limited
Date: 28/04/2016 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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