LONDON (Alliance News) - Atlas Mara Ltd Tuesday said it is confident of meeting guidance for 2015 and is considering further acquisitions as it reported a net profit for the first quarter of the year.
Atlas Mara, which was founded by ex-Barclays PLC chief executive Bob Diamond and Mara Group entrepreneur Ashish Thakkar, has taken stakes in banks in countries such as Botswana, Zimbabwe, Zambia, Tanzania, Mozambique, Rwanda and Nigeria. It raised USD325 million from an initial public offering on the London Stock Exchange in December 2013, followed by a further USD300 million in a private placement that was completed in August 2014.
The company said it is confident that results for 2015 will exceed the adjusted pro forma profit of USD7.2 million for 2014. It said its guidance for the medium term is unchanged, with the intention of growing loans and deposits by more than 1.5 times gross domestic product, aiming for a 60% to 65% cost to income ratio, a 20% return on equity, and a 2% return on assets.
The African banking group said net profit amounted to USD0.5 million in the quarter ended March 31. Net interest income, the difference between income received on assets and the interest paid on liabilities, was USD20.1 million, while revenue unrelated to interest income amounted to USD24.2 million. Impairments for bad loans amounted to USD5.1 million, while operating expenses were USD42.8 million.
The company said there is "no meaningful reported comparative information" because 2014 was its first year of operations.
Atlas Mara's net interest margin, a key driver of profitability, fell to 3.1% in the quarter from 4.6% in the corresponding three months of 2014, based on numbers provided by the company.
"Cost of funds remains high and, going forward, represents a key lever to improve the current pressure on net interest income and margins across all products," Atlas Mara said.
The company highlighted slower-than-expected growth in its loan book and a reduction in reference lending rates in Botswana as the main reasons for the pressure on net interest income and margin.
It said that non-interest revenue was in line with its expectations, citing "encouraging trends" in fee and commission revenue and increasing foreign exchange trading income.
Atlas Mara said it is discussing the execution of a share repurchase programme with advisers.
It also is mulling "external financing opportunities" in connection with its pipeline of potential acquisitions.
Atlas Mara shares were up 1.6% at 7.20 pence on Tuesday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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