03 Aug.
Absa plans to work more closely with Barclays.
Foreign investors are attracted by new projects, which South Africa does not have, but the country should take advantage of the present boom in commodities which so far it has not benefitted from, according to Absa chief executive Maria Ramos.
She said attracting investment was a big challenge for the country.
“Foreign investors look to domestic investors for partnerships in order to invest,” she said yesterday, the day of the release of Absa’s half-year results. “They like coming into new projects.”
Ramos denied that Barclays, the British bank which is the controlling shareholder of Absa, was considering increasing its stake in its South African subsidiary.
Ramos said: “We are working very closely with Barclays and we are talking about our one African strategy. Barclays is moving its Africa head office from Dubai to Johannesburg. That is an expression of confidence in Africa by Barclays and is making South Africa its financial centre on the continent. We will operate as one bank in Africa because Barclays has a footprint which is big and solid.”
Absa, through Barclays, has a presence in 12 African countries, which began in Egypt in 1864.
Ramos said in her results presentation that growing earnings on the continent was a priority. “Together with Barclays, we have a leading pan-African franchise.
“Nine of our 12 operations are top three by revenue and our combined revenue increased to £2.4 billion (R26.4bn) in the review period.”
Ramos refused to be drawn into the debate on the nationalisation of the major sectors of the economy, which has been raging since the ANC Youth League put it on its political agenda.
“I have no intention of entering into that debate today. I can talk about that some other time. Today is about Absa’s results.”
Mike Brown, the chief executive of Nedbank, entered the fray on Monday when he warned of the negative effect on investor confidence of talk of nationalisation, arguing it would not help to attract job-creating investment.
Ramos agreed with forecasts that South Africa’s gross domestic product would grow 3 percent this year.
“It is not shabby, given the global phenomenon. Europe and the US are losing jobs. Their economies have significant problems.
“Our economy is not growing strongly enough to create the type of jobs we need. We need a more sustainable global recovery,” she said.
Absa’s non-performing loans as a percentage of loans and advances was flat at 7.7 percent in the year to December. They were also flat in absolute terms, despite smaller inflows.
Loans subject to debt counselling fell to R4.4bn from R7bn in December
Absa Group shares gained 0.80 percent to R134.01 yesterday, while the JSE banking index shed 0.83 percent.
Source: Business report
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