Atlas Mara to cut jobs, costs

HARARE - BancABC Zimbabwe parent company, Atlas Mara, said it plans to cut staff as part of an $8 million cost-cutting drive following a difficult first half of the year, during which net profits slumped 71 percent.

The group, which buys banking assets in Africa to try and benefit from the region’s growth levels, is seeking to trim a cost-to-income ratio that climbed to 102 percent in the six months through June from 95 percent a year earlier as expenses accelerated at a faster pace than revenue.

Atlas Mara chief executive John Vitalo on Thursday said the London Stock Exchange-listed financial services firm executed a group-wide cost-reduction program to align its cost base with the current revenue environment.

“We expect to reduce headcount by 30 percent -— 35 percent across our shared services and centre and reduce non-staff central costs,” he said.

“We have accelerated growth plans for certain digital initiatives and the build out of our markets and treasury businesses to ensure we can deliver the level of revenue growth our investors expect of us into 2017 and beyond,” he added.

This was after the group, whose aim is to invest in creating a pan-African banking group, racked up a hefty loss of $6,7 million in the first quarter, although it still managed to eke out a net profit of $1,2 million for the first half as a whole, down from $4,1 million a year ago.

Vitalo conceded that the first half of 2016 presented a particularly difficult operating environment for the Bob Diamond-led company.

“The full impact of last year’s decline in African currencies, a more challenging macroeconomic backdrop and market liquidity constraints across a number of our countries of operation have all presented particular challenges to profitability,” he said.

With banks in seven African countries — including Nigeria, Zambia, Zimbabwe and Rwanda — the company is struggling to convince investors of its strategy of building a bank spanning the continent as growth across the region slows to a 15-year low.

Meanwhile, the group’s Zimbabwean unit registered net profit of $228 000 in the six months, up 241 percent from a loss of $162 000 in the same period last year.

BancABC chairman Alvord Mabhena said the group’s net interest income decreased by 35 percent to $12,3 million.

“This was driven by the controlled growth in credit with a focus on quality lending.

“In addition, the net interest also declined due to decrease in interest margins on the back of a declining interest rate environment offering financing at a more sustainable cost,” he said.

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