The increase in headline earnings comes affter the group acquired Barclays Africa Limited.
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The company results for the period ended 30 June 2014 also reported the group’s diluted headline earnings per share (HEPS) surging by 10 per cent to 720 cents from 655 cents.
“Although the nine per cent cost growth exceeded seven per cent higher revenue, pre-provision profit increased five per cent and was the main driver of earnings growth,” said the group.
“Credit impairments fell seven per cent, resulting in a 1.18 per cent credit loss ratio, while further strengthening portfolio provisions to 0.7 per cent of performing loans. A slightly higher effective tax rate of 29.2 per cent and 19 per cent higher indirect taxation were earnings drags,” reported [DATA BGA:Barclays Africa Group Limited].
The group’s retail and business banking headline earnings grew by nine percent to 3.8 billion rand, this has been attributed to the eight per cent lower credit impairments.
“Wealth, Investment Management and Insurance headline earnings were steady at 688 million rand with corporate and investment bank headline earnings surging 24 per cent to 1.9 billion rand, with 58 per cent growth outside South Africa.”
The group’s rest of Africa revenue rose 12 per cent with headline earnings rising by 28 per cent in constant currency, improving its contribution to 17 per cent of total earnings.
Despite economic headwinds in the global economy, the company is positive about the future.
“We expect four per cent global GDP growth in the second half compared to 2.5 per cent in the first,” noted Barclays.
“Domestically, the growth outlook has deteriorated markedly since the start of the year and we expect growth to decelerate to 1.5 per cent in 2014 from 1.9 per cent in 2013.”
The company says it expects stronger growth in the Barclays Africa Group markets beyond South Africa, despite fiscal and external account challenges in some of the larger economies.
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The group says it is confident that the Rest of Africa growth could reach 6.3 per cent again in 2014, supported by infrastructure investment and improving global growth prospects.