Diamond’s Atlas Mara Plans Job Cuts After First Half Profit Plunge
Atlas Mara, an investment vehicle partly owned by former Barclays Chief executive Bob Diamond that has been acquiring banks in sub-Saharan Africa, plans to cut its employees by about 35 percent after it suffered a 71 percent plunge in half profit.
The London Stock Exchange listed financier’s posted a $1.2 million protif in the first six month of this year, compared to the $4.1 million it made in the same period last year.
Planned job cuts could save the company $8 million on operating costs annually, starting 2017, according to a statement sent posted on the The London Stock Exchange website.
Currency depreciation in Nigeria, which is the bank’s biggest market and other countries in Africa, and the fall in commodity prices for oil in the West African nation and copper in Zambia were major contributors to the dip in profits, the statement said.
Nigeria’s economy entered into a recession in June, further shooting down prospects of financial recovery and sending banks fortunes lower.
The half-year profit dip comes just months after the bank incurred a $6.7 million loss in the first quarter, Wall Street Journal reported.
Atlas Mara Ltd operates in seven countries across Africa; Tanzania, Rwanda, Botswana, Mozambique, Zimbabwe, Nigeria and South Africa.
It was founded by Diamond and Ashish Thakkar, a Ugandan-born Dubai-based entrepreneur who owns Mara Group.
Atlas Mara Ltd is also focused on reducing non-performing loans and impairments as part of boosting its returns in the Southern Africa markets of Zambia, Mozambique, Zimbabwe and Botswana, according to the bank.
The bank expects improved results in the second half of the year due to the measures it has put in place despite weaker currencies and the expected costs of integration, Bloomberg reported.
The Rwandan economy which relies on agriculture, services and industry performed well in the first quarter and holds better future prospects for the bank.
Atlas Mara owns a 62.06 percent majority share in the combined entity of Banque Populaire du Rwanda and BRD Commercial Bank.
The Sub-Saharan bank is also in talks to buy Barclays Africa Group’s operations, which announced its decision to exit the continental market by selling its 62. 3 percent shares in February, this year.