LONDON (Alliance News) - Africa-focused banking investor Atlas Mara Ltd said Tuesday its full-year profit rose sharply amid cost-cutting, as it appointed a new chief executive after the post had stood vacant for 14 months.
In 2017, pretax profit expanded to USD53.1 million from USD9.4 million the year prior. This was after total income rose to USD260.5 million from USD241.7 million the year before.
Profit performance was also helped by a fall in operating expenses in 2017 and a rise in the share of profits from associated companies. Operating costs fell to USD223.5 million from USD234.8 million the year prior. Associate profit share rose to USD38.4 million from USD17.9 million the year before.
"2017 was Atlas Mara's best operating performance to date," Atlas Mara Chairman Bob Diamond said. "Against a mixed macroeconomic backdrop, we delivered our highest reported net profit to date, improved credit quality, stabilised interest margins, established our asset-light business lines, and positioned the company to better achieve our strategic growth objectives."
Non-performing loans as a percentage of loan book fell to 11.8% from 13.3% the year prior.
"One year ago," Diamond added, "we promised to meet two clear performance targets: more than USD20 million in cost savings at the centre, and more than double our net profit from 2016. We delivered on both through the efforts of our committed management and staff throughout our businesses. We have a leaner Shared Services Centre with stronger presence on the ground, and we expanded our product portfolio and improved the quality of our loans and deposits."
Atlas Mara said it made USD27 million in shared services and centre cost savings during 2017.
In January, Atlas Mara increased its stake in the Union Bank of Nigeria to 48.0%. This was after building a 44.5% stake in the firm in June 2017, completed in October.
"We significantly increased our investment in UBN, and we brought in a new strategic long-term partner in Fairfax," Diamond said. "Despite headwinds, we saw significant penetration across customer segments, and every country achieved positive profit after tax for the year."
In September, Fairfax Africa Holdings Corp built a 42% stake in Atlas Mara as part of a USD200 million fundraise.
"We are better positioned to grow within our markets, and to benefit as they turn the corner economically," Diamond said. "I am very pleased to deliver a strong 2017, and am even more excited for what lies ahead. We have more work to do, but our company is the strongest it has ever been, and I am confident we will deliver increased value for our shareholders in 2018."
Meanwhile, Atlas Mara has appointed John Staley as its new chief executive officer from the start of May, after the post had sat empty for fourteen months. Staley was previously chief officer for finance and innovation at Equity Group Holdings, owner of Equity Bank.
"We are very pleased to appoint John Staley as the company's new CEO," Diamond added. "His appointment reflects the ambitions of the company, including to build out a leading IT infrastructure, and to utilize digital products and channels to accelerate the pursuit of the company's strategy. The board and I look forward to working with John."
Atlas Mara's former CEO John Vitalo left the firm in February 2017.
As part of the strategic investment deal with Fairfax, that company also had the right to appoint four directors to Atlas Mara's board. As a result, Simon Lee - former CEO of RSA Insurance Group PLC - was appointed to replace Quinn McLean.
"I am also pleased to welcome Simon Lee to the board and look forward to working closely with him," Diamond said. "He brings a long record of accomplishments and his skills will complement the board and add value."
"On behalf of the board I also want to thank Quinn McLean for his contributions, particularly in the areas of corporate finance and innovative structured finance," Diamond continued. "We are grateful for his service to the company and wish him well in the future."
Atlas Mara also has issued USD37.5 million in convertible bonds due April 2020, with an interest of 7.5%. Fairfax will invest in USD16.0 million of those bonds. All convertible bonds will be convertible at a 10% discount to the price at the time of issuance.
Shares in Atlas Mara were 1.8% higher at USD2.80 on Tuesday in London.
