Bob Diamond's Atlas Mara Posts $6.7 Million Loss
May 26 2016 - 6:00AM
Dow Jones News
LONDON—Atlas Mara Ltd., the listed Africa banking group
co-founded by Bob Diamond, Thursday said high operating costs and
bad loans in Zimbabwe dragged it to a $6.7 million net loss in the
first quarter.
Weak currencies in the countries Atlas Mara operates in,
including Nigeria and Zambia, wiped $1.1 million from first-quarter
results. Costs to acquire Finance Bank of Zambia PLC and make other
potential purchases were $6 million. Revenue in the three months
was $51.9 million, up 30% on the same 2015 quarter. Operating costs
excluding mergers and acquisitions rose to $51.7 million from $30.7
million in the first three months last year.
Mr. Diamond co-founded Atlas Mara with Anglo-Ugandan
entrepreneur Ashish Thakkar in 2013, to build a banking group
across sub-Saharan Africa. Its businesses include BancABC in
Botswana, Zimbabwe, Mozambique, Tanzania and Zambia, Banque
Populaire du Rwanda and a 29.9% stake in Union Bank of Nigeria PLC.
The group has been hit by worsening economies and a weak dollar in
its main markets and last month said it might merge with Barclays
PLC's African unit, Barclays Africa, if a planned bid by Mr.
Diamond and Carlyle Group LP for part of the business succeeds.
"This level of performance is clearly below where we want to be,
notwithstanding the challenges of a more difficult economic
backdrop and the full impact of weaker exchange rates across our
markets," Chief Executive John Vitalo said.
In an update on the agreed purchase of Finance Bank of Zambia,
Atlas Mara Thursday said it aims to complete the roughly $73
million transaction by the end of the second quarter.
The company said its southern Africa segment fared the worst in
the quarter, with a $6.3 million net loss, as it took fresh
provisions in Zimbabwe. The UBN stake contributed $6.9 million in
net profit and Atlas Mara's east Africa business in Rwanda made
$700,000 in the quarter.
"We have clear cost reduction plans and revenue initiatives to
ensure that the group is positioned to tackle current headwinds,"
Mr. Vitalo said.
Atlas Mara had reported a $500,000 net profit in the first
quarter of 2015. After stripping out merger and acquisition
expenses and other one-off costs, it made a $2 million net loss in
the first quarter compared with a $9 million net profit in
first-quarter 2015.
The company didn't make any statement Thursday about the
potential merger with Barclays Africa. Barclays started selling
down its 62.3% stake in Barclays Africa this month and still holds
50.1% of its shares. Several potential bidders say they are
interested in buying shares in the unit, which includes Absa in
South Africa.
Mr. Diamond told Atlas Mara shareholders last month that funding
was in place for a bid by a consortium that would include his
private-equity firm, Atlas Merchant Capital, and Mr. Thakkar's Mara
Group.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
May 26, 2016 05:45 ET (09:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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