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Barclays affirms commitment to SME sector

By: Charles Benoni Okine
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Ms Osei-Poku (left ) addressing the media as the bank released its financials for the year ending December 31, 2018
Ms Osei-Poku (left ) addressing the media as the bank released its financials for the year ending December 31, 2018

Barclays Ghana has stated that the bank’s commitment to supporting the Small, Medium Enterprises (SME) sector remains intact even as the bank draws closer to fully changing to its new brand name, Absa.

The bank said, recognising the important role the sector plays in the growth of the economy and creating employment for the people, the bank will continue to lend its support in a manner that will enable the SME sector to thrive.

The Managing Director of the bank, Ms Abena Osei-Poku, gave the assurance in an interview last Thursday in Accra.
“The change of our brand name gives us the leverage to enable to draw closer to the SMEs because this time around, we are going to do things differently and support our own in a much stronger way”, she said.

The assurance comes at a time when the SMEs in the country continue to agitate over what they described as the lack of needed support to enable them to grow their business.

Among the major challenges is the high and prohibitive interest rates on loans.

Ms Osei-Poku said SMES are special to the bank and pledged the bank’s resolve to ensure that players in that sector are given the necessary advise in cash management, bookkeeping and other basic requirements needed to help them to manage their businesses more effectively.

Panic in FX market
On the panic in the Forex market, she said Barclays Bank Ghana, has confidence in the local currency and noted that there is no need for the public and the investor community to panic about the depreciation of the Ghana cedi against some of the major foreign currencies, particularly the United States dollar.

According to her, the present depreciation of the local currency against the dollar for instance was a result of some blips and not a situation that warrants panic and anxiety.

She said the successful implementation of prudent economic policies that had now seen Ghana exiting from the International Monetary Fund’s (IMF’s) Extended Credit Facility (ECF) programme, the raising of the $3-billion Eurobond at a lower coupon rate, and the positive Fitch rating of Ghana should be enough to demonstrate that, the economy is on track to impact the strength of the Ghana cedi.

“In the last couple of weeks, the Bank of Ghana for instance, released a large chunk of dollars to players in the banking industry to meet our requirements. That was unprecedented and we feel that should the speculations stop, the Ghana cedi will stabilise the way we want it”, she said.

Financials
On the financials of the bank for the year 2018, she said the bank achieved an increase in customer loans and advances by about 35 per cent and an increase in customer liabilities, demonstrating growth “in our underlying business with our clients and customers”.

For instance, accruing to the financial of the bank as published in the media, loans and advances to customers went up from GH¢2,593,012,000 in 2017 to GH¢3,204,859,000 in the year under review.

The phenomenon led to a net interest income rise from GH¢650,724,000 in 2018 from the 2017 figure of GH¢531,429,000 in 2017. This represents positive variance of 22 per cent.

The banks’ operating costs increased marginally to 14 per cent in 2018. The cost to income ratio increased to 38.4 per cent from 36 per cent in 2017 primarily as a result of costs related to the bank’s separation from Barclays Plc.

Ms Osei-Poku said “after the injection of internally generated funds to meet Bank of Ghana’s new capital requirement, we achieved an impressive return on equity of 29 per cent, making us one of the best in the Ghanaian banking industry for the third year running”.

On the bank’s profit before tax, the published financials indicated a marginal rise from GH¢550,256,000 in 2017 to GH¢554,447,000 in 2018.

According to the Barclays Ghana MD, “these achievements in 2018 confirmed the bank’s resilience and accelerated progress towards becoming an aspirational and preferred partner for its customers, employees, suppliers, the government and communities within which the bank works.

She also noted that the positive results has provided the bank a firm foundation to transition seamlessly from Barclays to Absa, grow the business and cement a place as an established player in Ghana with a global reach.