Atlas Mara posts $28.6 million in six months to further cut Union Bank bad loans

Atlas Mara

Emerging Markets financial services group, Atlas Mara said its group recorded a profit after tax of $28.6 million for the first half of the year 2018.

The result is an improvement over $11.5 million reported in the same period last year.

The group is looking at further cutting bad loans at Union Bank of Nigeria, its flagship acquisition company where it aims to get a controlling stake and take it private.

Some its key highlights for the period are:

·    Launched a deposit drive across Retail, Corporate and Institutional segments across the franchises to lower the cost of funds and generate sustained funding for balance sheet growth.

·   In Botswana, successfully renegotiated, for a 3 year period, Retail savings and loans schemes with the key employee unions and signed a contract to provide prepaid Pula cards to Public employees.

·   Launched an online cash management solution for SME and Corporate clients in Mozambique, and saw continued growth in Agency banking which now has 160 agents and 30,000 new accounts of which more than 20,000 were acquired in the first half of 2018.

·    Continued to grow our presence in the corporate market in Rwanda, through our participation in a $50 million syndicated loan for a large MNO (our share is $11 million) for infrastructure expansion and modernisation, as well as through a $5 million facility to a corporate client contracted to construct a new airport and another $5 million pre-export value chain financing for the country’s leading coffee exporter.

·   Evident signs of recovery in our Markets and Treasury business as volumes slowly pick up after the sharp contractions experienced in the previous year, reflecting macro factors and our own initiatives.

·    Facilitating financial inclusion in Zambia where the subsidiary is soon to launch a mobile money proposition for the currently unbanked which will be available in seven local languages and will allow clients to save and borrow digitally.

·   Increased public sector lending business during the period with lines for the energy services provider for infrastructure development in Zambia, while continuing to explore other public sector initiatives for financing highways, road network and Agricultural subsidy finance.

·    Introducing supply chain financing credit enhanced accounts payable product in Zimbabwe to  facilitate trade flows and enhance our position in trade finance.  We also introduced a new Agricultural Unit to take advantage of nascent growth in the Agricultural sector which is a major contributor to the country’s GDP.

·   Raised $40 million for the second tranche of the road infrastructure programme through our Markets and Treasury unit in Zimbabwe. 

·    UBN’s financial performance improved across a number of key metrics from FY 2017 to H1 2018 as well as over the same period last year.  Return on Tangible Equity was up at 10.4% for the first six months of 2018, supported by profit after tax growth of 25% over the same period last year.

·    During the course of the first six months of 2018, UBN also focused on improving fee and other non-interest income to offset the impact of declining asset yields in Nigeria.