Reinette van der Merwe’s decisive leadership at the helm of the country’s most profitable bank, Barclays Bank of Botswana has been rewarded with more than double her previous total earning in 2014, according to her first full reporting period, the lender’s financial records depict.
Van der Merwe grossed P5, 493 million last year, in stark contrast to the P2, 256 million remuneration for 2014. The figures, labelled as Executive Remuneration in the Barclays annual report reflect the Bank’s growing appreciation for the tenacious Executive. Assuming that the figures exclude bonuses, The Business Weekly & Review calculates that Barclays Bank paid P457 750 monthly for Merwe’s services, using the bank’s 2016 annual report as a guide. In comparison, 2014 calculations sit at P187 750 each month.
Van der Merwe took to the helm of the listed counter in November 2013, when the ship was floundering in a storm, preceded by controversy that had cost Barclays P2 billion in market capitalization. Profits for that year fell embarrassingly by 34 percent in the face of adverse business environment before she led a transformational strategy. Barclays had appointed a caretaker in the interim. Her leadership augured well, a sensible blend of ambition and drive to turn around the fortunes of the business.
Barclays banks’ decision to appoint Van der Merwe as the MD became a defining moment in the stormy waters the bank was traversing. Under her guidance, Barclays launched a five-year strategy and embarked on a journey to transform the bank’s operations. 2014 was the year in which the strategy came into full effect. The transformation programme had three components: Turnaround, Return to Acceptable Numbers and Sustainable Forward Momentum, according to records.
As Barclays executed this strategy, Van der Merwe’s priorities were to aid it to become one of the top three by revenue; a Cost-to-Income ratio in the lower 50s; and delivery of Return-on-Equity (ROE) of between 18 percent and 20 percent. The objectives seemed too lofty to be true, but the bank surpassed these commitments. The MD said in 2014 that they were second by revenue in the market and achieved an ROE of 23.2 percent. Profits bounced back by more than 15.5 percent to P335.8 million. The strategic priorities were: to grow Corporate and Small Micro Enterprise businesses while investing in people and leadership; selectively growing the Retail Banking secured lending portfolio; and optimize the balance sheet, while ensuring continual investment in the business.
The bank says key highlights of the Retail Business (RB) were Asset growth and growth in Non-Interest income, “Asset growth came from Loans and Advances underpinned by strong growth in Mortgages.” As a result Retail Asset growth was 9.6 percent.
Footprint and channel strategy played to the bank’s advantage as it saw transactional activity grow by 25 percent, leading to a reduction in interest expense of 23 percent, ultimately resulting in an income growth of 39 percent in Corporate and Investment Banking (CIB), an area it has been bullish in.
In 2015 Barclays had a balance sheet of P14.6 billion and were well capitalised. The banks’ retail Assets grew by 50 percent, largely driven by loans to the agriculture, retail and tourism sectors, according to financial records. CIB delivered strong growth, particularly in the second half of 2015. Merwe said they had focused on deepening Public Sector capability through Public Private Partnership and supported corporate expansion for quantum growth. Customer assets grew by 76 percent on the back of new asset bookings despite the slow domestic economic environment. CIB earnings grew by 60 percent resulting in CIB’s Profit-Before-Tax (PBT) growing 58 percent year on year.
Against the backdrop of a depressed economy characterized by towering impairments that hit competitors, Barclays profits turned bullish, profits were up by 49 percent, with the aid of Mumba Kalifungwa, the Finance Director who earned P2, 578 million for his incisive leadership.
The RB business saw steady improvement in financial performance during the year. This improvement in profitability, Merwe writes, was as a result of a revenue growth of 11 percent year-on-year. Income in the CIB segment grew by 30 percent year-on-year, as a result of “our strategy to focus on a few selected market sectors and provide tailor-made solutions.”
Markets are exhilarated by the latest report, as evidenced by a leap in share price and market capitalization which were once at low ebbs. The bank is now the third valued domestic counter with a valued of over P5 billion and has one of the most bullish share prices trading at P5.89 by Thursday morning.