Diamond’s Atlas Mara Swings to Profit After Impairments Drop

Atlas Mara, co-founded by the former head of Barclays Plc Diamond and Ugandan entrepreneur Ashish Thakkar, has been expanding by buying African financial services companies.

Atlas Mara, co-founded by the former head of Barclays Plc Diamond and Ugandan entrepreneur Ashish Thakkar, has been expanding by buying African financial services companies.

Photographer: Patrick T. Fallon/Bloomberg
  • Reduced bad loans at BancABC unit in Southern Africa
  • Seeks a presence in `all four trading blocks in Africa'

Robert Diamond’s Atlas Mara Ltd., the banking group that has acquired African lenders, reported its first half-year profit after reducing impairments at one of its units.

Net income was $4.1 million in the six months ended June from a loss of $17.3 million a year earlier, the company, incorporated in the British Virgin Islands and traded in London, said in a statement on Thursday. Impairments dropped to $6.1 million from $17.2 million a year earlier.

“We re-engineered BancABC’s entire credit process,” John Vitalo, appointed chief executive officer last year, said by phone from Zambia, referring to ABC Holdings Ltd., the lender operating in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe that Atlas Mara acquired in 2014. “The drop in non-performing loans is as a result of that.”

Atlas Mara, co-founded by the former head of Barclays Plc Diamond and Ugandan entrepreneur Ashish Thakkar, acquired ABC Holdings and ADC African Development Corp. last year and bought a stake in Union Bank of Nigeria Plc. in September. The group is present in seven African countries and continues to evaluate further acquisitions, it said in the statement.

Atlas Mara is in talks to buy Finance Bank Zambia Plc, people familiar with the process said in June. It’s considering bidding for a stake in Mozambican lender Moza Banco SA, people familiar with the matter said in May.

‘Notoriously Difficult’

“We want to be present in all four trading blocs in Africa,” Diamond said on the same call. “We want to be in 10 to 15 markets in two to three to four years’ time. Mergers and acquisitions are notoriously difficult to predict the timing of.”

Atlas Mara fell 0.4 percent to $5.70 by 10 a.m. in London trading. The stock has dropped 32 percent this year. London’s FTSE 350 Banks Index is down 8.8 percent.

“We have an active pipeline of other ongoing discussions and we’re finding the environment very receptive,” Vitalo said. “We’re very disciplined buyers. We’re very mindful of our cost of equity.”

Atlas Mara’s second-half results should be better than the first half, the company said in its statement. Improvements will be seen because of a continued focus on credit, a reduction in the cost of funds and the widespread rollout of mobile banking, Vitalo said.

“We are confident that the demonstrated execution of our strategy will, in time, be reflected in our share price, but share the frustration of our investors with respect to recent share price performance,” Atlas Mara said in the statement. The company said it “still has significant work to do and the operating environment in several countries of operation remains challenging.”

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