[2008-09-15]  Growth as Barclays Stock is Described as 'A Good
Barclays Bank has bounced back to register a growth in profits, recovering from the Lobtrans saga which squeezed its income in the previous reporting period .For the six months ended 30 June 2008, the bank announced that its interest income went up by 10.3 percent to BWP724mn, while interest expenses went down by 2.5 percent on the back of a marginal growth in deposits due to new customers and a significant drop in deposits from other banks. Due to a large impairment charge to cover for the exposure in collapsed transport company Lobtrans, the bank realized a slowdown in profits by 16 percent in 2007, for the first time in recent history. In the period under review, net interest income went up by 28.9 percent to BWP346mn. Fee and commission income went up by 26.2 percent to BWP101mn on the back of increased transaction volumes and increased retail lending. Net fee and commission income went up by 24.1 percent to BWP96.9mn while net trading income increased by 28.9 percent to BWP61.3mn.Other operating income went up by BWP32.1mn, a direct result of gains realized on VISA investment to the tune of BWP32mn."Total income went up by 36.0 percent to BWP538mn," the bank said in a statement. "However, the exclusion of the gains on the VISA investment would result in a 27.9percent increase in total income.” On the other hand, the impairment loss went up 173.6 percent to BWP25.9mn, indicating the level of growth in loans and advances. At this level, impairments are 0.58 percent of loans and advances while operating expenses, driven by staff costs, went up by 20.6 percent to BWP252mn."This is in line with the expansion of the retail expansion programmed," the bank said. Profit after tax (PAT) went up by 41.2 percent to BWP209 mn. With the exclusion of gains on the VISA investment, PAT rose by 19.5 percent while an interim dividend of 9thebe per share has been declared. The balance sheet, on the other hand, grew by 6.2 percent on the back of a 36.4-percent increase in loans to customers., the share price has even firmed significantly on the back of a positive trading update which the company had published announcing that it was expecting earnings for the half-year to be above expectations. In a statement released yesterday, Stockbrokers Botswana says it views Barclays stock as a good buy. "The counter offers a dividend yield of 2.9 percent and has gained 15.1 percent since 11 August 2008," says Stockbrokers. "We believe that an upside potential exists and maintain our 'buy' recommendation."
Source: ALLAFRICA