Former Barclays boss Bob Diamond has said he is “cautiously optimistic” after half-year profits at his African banking business more than doubled.
Atlas Mara’s latest earnings showed pre-tax profits surged from 16.8 million US dollars (£13.1 million) to 36.1 million US dollars (£28.2 million) in the six months to June 30.
The firm was boosted in part by “improved performance” of Union Bank of Nigeria (UBN), in which Atlas Mara holds a near 49% stake.
UBN cut its bad debts to 10.8% thanks to credit risk management and ongoing efforts to recover non performing loans.
But Atlas Mara suffered a sharp downturn in pre-tax profits in the second quarter, coming in at just 10.1 million US dollars (£7.9 million), lower than the 26 million US dollars (£20.3 million) logged in the preceding quarter.
Atlas Mara’s new chief executive, John Staley, said “the market backdrop has been less buoyant than it was in 2017″.
“Lower international demand for commodities, international trade tensions, central banks in the US and Europe pursuing less accommodative monetary policies and the relative strengthening of the US dollar have reduced foreign inflows into, and the economic growth trajectory in, some of our markets.
“This has resulted in tighter liquidity conditions, increased capital requirements and lower credit demand from viable customers.”
Total income for the half-year fell 8.7% to 112.3 million US dollars (£87.7 million), while its net interest margin – the difference between the interest received from borrowers and the amount paid out on deposits – on total assets fell to 4.4% from 5.4% a year earlier.
Atlas Mara’s founder and chairman Mr Diamond said he was “pleased” with the results, which included a positive net profit “albeit with some challenges”.
“We maintained a largely stable balance sheet while weathering substantial macroeconomic challenges in some key markets.
“At the same time, we saw progress in the countries and business lines, as we continue to establish our franchise and pursue our long‐term goal of being a top-tier player across our footprint.”
He highlighted increased investment in Nigeria – Africa’s largest economy – including its enlarged stake in UBN.
Mr Diamond added: “Although we expect the balance of 2018 to bring continued challenges in our growth and rate environments, the board and I remain cautiously optimistic about the future.
“We are in attractive markets for which we expect the long‐term trends to remain favourable.”
The long-time banker served as chief executive at Barclays between 2011 to 2012 – before resigning amid the Libor scandal.
He later went on to launch Atlas Mara in 2013.