Barclays Africa Group is making inroads into Nigeria’s investment banking market with the application for an equities trading license. The group which bought Barclays PLC’s operation in 8 African nations in 2013 for $1.52 billion in stock, is rolling out corporate and investment banking services across the continent while using its parent’s franchises to boost consumer lending outside of South Africa.
Maria Ramos, the Chief Executive Officer of Barclays Africa is confident that the group’s operations outside of South Africa, which currently account for 19.5 percent of earnings, can contribute 20 to 25 percent of earnings by next year. The lender is targeting a return of 18 percent on equity up from 16.7 percent but acknowledges that it may be a stretch to get there.
Read more on Barclays Africa Group’s Expansion into Nigeria http://www.bloomberg.com/news/articles/2015-03-27/barclays-africa-applies-for-nigerian-equities-trading-license and http://mg.co.za/article/2015-03-05-shareholders-cautious-about-upbeat-barclays-africa
Despite Barclays Africa’s upbeat conviction that it is on its way to becoming one of the continent’s major banks, investors remain cautious about the growth of the group. The release of the group’s annual results revealed a 6% growth in revenue as compared to 9% for the rest of Africa and resulted in a dip in the bank’s share price. Pursuing a growth strategy may be rocky at times; it is crucial for directors and executives to manage the expectations of investors so they stay aligned to weather the journey. Regardless of its impact on the market in the short-term, maintaining a disciplined practice of sharing timely information which accurately reflects the company’s current performance and highlights underlying assumptions about its projected outlook will likely reinforce the credibility of the management team and boost investor confidence in the future of the company.