Barclays Africa profit rises as U.K. parent considers exit

Barclays Africa Group Ltd., the South African lender that may be sold by its London-based parent, said full-year profit climbed, meeting analysts’ estimates as earnings growth in the rest of the continent outpaced that at home.

Net income increased to 14.3 billion rand ($900 million) from 13.2 billion a year earlier, the Johannesburg-based bank said in a statement on Tuesday. Earnings per share excluding one-time items rose to 16.86 rand, in line with the median estimate of 13 analysts surveyed by Bloomberg.

Barclays Plc is reviewing its 62.3 percent stake in South Africa’s third-largest lender by market value as the rand weakens against the pound, hurting returns when converted to the British currency. It also comes as the continent’s most industrialized economy hovers near recession and a credit-rating downgrade to junk, while the highest interest rates since 2010 threaten to spur an increase in unpaid loans.

“We expect low single-digit loan growth, with rest of Africa growing faster than South Africa,” Barclays Africa said in the statement, without detailing its parent’s plans for the bank. “The group’s net interest margin should decline slightly. The credit-loss ratio is expected to increase, as arrears are rising and we believe non-performing loans have bottomed.”

– Bloomberg