Atlas Mara records $4,1 million profit

Atlas Mara records $4,1 million profit

HARARE, August 28 (The Source) – BancABC Zimbabwe’s parent company, Atlas Mara, has registered $4,1 million after tax profit in the half-year to June compared to a loss of $3,2 million reported for the prior year period.

The company, which is focused on sub-Saharan Africa, was co-founded by the former Barclays head, Bob Diamond, and entrepreneur Ashish Thakkar.

The latest results also reflect a great improvement from the group’s $63,1 million loss for the full year to December 2014.

Atlas Mara chief executive John Vitalo on Thursday said the group’s net interest income expanded by 8,5 percent against the prior period on a constant currency basis on the back of costs of funding improvements in all of the Southern African countries.

The London-listed company reported loans and advances of $1,17 billion, up 8,9 percent from December 2014 on a constant currency basis, “reflecting the current emphasis on credit origination improvement processes.”

It attributed a 8,5 percent currency-adjusted increase in net interest income to “costs of funding improvements in all of the Southern countries.”

At June 30, Atlas Mara’s equity stood at $639,4 million, down $43 million since the year-end due primarily to the dollar’s gains against African currencies.

Vitalo noted that Atlas Mara’s Zimbabwean unit, BancABC, failed to perform due to liquidity challenges that continue to worsen, exacerbated by persistent trade deficits in the country.

“BancABC Zimbabwe’s cost of funding remains a key focus and will be achieved through an intense focus on deposit mobilisation.  A decrease in BancABC Zimbabwe’s loan book had a corresponding impact on interest income as the bank focused on a low-risk lending strategy in a competitive market in a challenging business environment,” he said in a statement accompanying the firm’s financial statement.

This comes as Zimbabwe’s economic challenges continue to put negative pressure on business performance and the slowdown in economic activity is expected to continue throughout 2015.

Vitalo said the positive impact of the financial services group’s Special Operations Unit, tasked with the restructuring, resolution and recovery of non-performing loans, was evident in various asset recoveries at BancABC Zimbabwe during the first half of this year and is expected to continue to positively impact results.

“Furthermore, various cost reduction and optimization initiatives have been put in place by management to weather the current challenging market conditions,” he said.