Gillian Jones
BARCLAYS Africa will have to show it has stopped “bleeding customers” to reassure investors it is back on track when it releases its 2013 full-year results on Tuesday.
The group‚ headed by Maria Ramos and which extended its African operations in a deal with the UK’s Barclays in 2013‚ has said diluted headline earnings per share for the year are expected to be 13%-14% above the previous year’s earnings.
The bank’s share has underperformed in the past year compared to its peers‚ having dropped 26.7%‚ while FirstRand was down 3.6%‚ Standard Bank dropped 2.6% and Nedbank was up 0.2%.
First Avenue Asset Management’s Matthew Warren said on Friday the most important number to come out of the results would be the customer count.
“The last set of results showed a bleeding of customers … it’s critical that they staunch that loss‚” he said. “This is how you spread the cost of a retail bank. The more customers‚ the better the costs.”
Sanlam Investment Management senior financial analyst Catherina du Toit agreed that the bank needs to show it is addressing the loss of customers.
“They must show the market that though the rest of Africa has been added‚ their main businesses in South Africa are performing well‚ and that they are focused on South Africa ‚” she said. The bank reported a 5% drop in customers to 9.1-million in its interim results. Some customers‚ who had migrated to institutions offering easier credit‚ had taken their transactional accounts with them‚ said Mr Warren.
Higher-end banking clients had also left and largely gone to Nedbank and First National Bank‚ he said.
The group had “neglected branding and advertising while sorting out things internally”.
The results will indicate whether the vast advertising campaign Barclays launched last year has been effective.
Mr Warren expects the bank to have stabilised‚ though revenue growth will be slow.
Barclays would have focused on cost controls‚ as it had done in the past two‚ he said.
He also expects improvement in the bank’s credit loss line. © BDlive 2014