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ATLAS Mara reported a loss of $2 million for the three months ending March 31, compared with a profit of $9 million in the same period last year mainly due to credit provisions for corporate loans in Zimbabwe and loss on African currencies against the US dollar. The loss excluded once-off items and costs tied to mergers and acquisitions, said Atlas, an investment vehicle owned by former Barclays Plc chief executive Bob Diamond and Ugandan Ashish Thakkar.The West Africa and East Africa businesses recorded profits of $6,9 million and $700 000 respectively, but the Southern Africa business lost $6,3 million, the company said. In April, the company had informed the market that it expected to report a loss.
“A deliberate policy of managing down lower quality, higher risk revenues coupled with additional credit provisions taken in Zimbabwe, with no recoveries from the non-performing loan portfolio in the quarter, were the principal drivers behind the loss,” said Atlas Mara.
The management said the new provisions will be reversed, with good progress being made in the continued efforts to monetize some of the non-performing loans soon. Loss from depreciation of African currencies against the greenback was $1,1 million.
The company said it still aims for its full-year results for 2016 to exceed the reported profit of $11,3 million in 2015 but recognizes that weaker African currencies and a more challenging economic backdrop provide meaningful headwinds to this outcome.
“We have clear cost reduction plans and revenue initiatives to ensure that the group is positioned to tackle current headwinds, the group said. “We remain committed to delivering increased profitability for 2016 relative to 2015, although we expect the year to be one of uneven quarterly performance with improving profitability over the course of the year as we execute on our focused initiatives,” it added.
The East Africa segment reported a profit of $700 000 from a loss $2,1 million, a reflection of the strength of Rwandan banking franchise. The West Africa segment, represented by Atlas Mara’s 31,15 percent stake in Union Bank of Nigeria contributed a net profit of $6,9 million, up from $5,2 million in the previous comparable quarter.
Reported loans and advances were $1,34 billion and deposits were $1,63 billion, the group said.
Atlas has expressed interests in buying Barclay’s African interests, which it said would help it accelerate its strategy to build a major financial firm across sub-Saharan Africa.
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