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«Atlas Mara Limited Announces 2015 Year‐End Results Atlas Mara Limited (Atlas Mara or the Company, including its subsidiaries, the “Group”), the ...»

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26 April 2016

Atlas Mara Limited Announces 2015 Year‐End Results

Atlas Mara Limited ("Atlas Mara" or the "Company", including its subsidiaries, the “Group”), the

sub-Saharan African financial services group, today releases summary full year results

extracted from its audited financial statements for the year ended 31 December 2015.

Key financial highlights during the period

 Atlas Mara reported profit before tax of $19.2 million compared to a loss before tax of $58

million for the prior period. The Group reported net profit after tax for the year of $11.3 million compared to a Pro-Forma loss of $47.8 million for the year 2014. The Company delivered net interest income growth of 27.8%, non-interest revenue growth of 21.4% ahead of operating expenses growth of 20.3% year-over-year, on a constant currency basis.

 On an adjusted operating profit basis (excluding one-off items and M&A transaction expenses), Atlas Mara reported a profit before tax of $38.7 million (Pro-Forma 2014: $37.1 million) and net profit after tax of $24.9 million (Pro-Forma 2014: $9.7 million). The Group cost to income ratio was 85.1% (Pro-Forma 2014: 81.2%). This reflects solid operational momentum coupled with targeted investment in building a scalable banking proposition and investment in the Groups’ technology platform.

 Union Bank of Nigeria Plc (“UBN”) contributed income from associates of $20.3 million, reflecting Atlas Mara’s 31.15% shareholding on an equity accounted basis. This represents a decrease of 43.7% year-over-year, excluding the impact of Naira depreciation, largely as a result of the non-recurrence of disposal gains reported by UBN in 2014.

 Reported equity at period end was $625.5 million, a decline from 31 December 2014 reported equity of $682 million, largely due to $92.6 million of foreign exchange translation losses driven by the strengthening of the U.S. Dollar against most African currencies.

Implied book value per share at 31 December 2015 was $8.94 (compared to $9.13 at 30 June 2015). Tangible book value was $7.00 at year end.

 Following the announcement of a share repurchase programme of up to $10 million at the time of the third quarter results, the Company purchased 1.03 million shares in the open market for aggregate consideration of $5.29 million (through 15th March 2016). Over the course of 2015, a voluntary stock repurchase programme by members of Atlas Mara’s Executive Committee purchased 199,928 shares in the Company at a cost of $1.3 million.

 The Company announced a partnership with the U.S. Government’s Overseas Private Investment Corporation ("OPIC"), whereby OPIC is committing $200 million for selected acquisitions and inclusive on-lending.

 The Company issued a $63.4 million placement of 8% senior secured convertible bonds due 2020. Subsequent to the initial offering in October, the Company recently announced the placement of an additional $17.4 million of bonds. The bonds are convertible into the ordinary shares of Atlas Mara at a price of $11.00 per share.

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 Loans and advances grew by 15.2% on a constant currency basis, reflecting Atlas Mara’s investment in improved credit origination processes. Deposits increased by 11.5% on a constant currency basis, as a result of the Company’s focus on liability management.

 Client acquisition strategy and cross-selling initiatives have been bearing fruit. Retail deposits comprised 20.8% of the total deposit book as at 31 December 2015 (compared to 18.3% at 31 December 2014). Corporate deposits were 36.5% of the total deposit book at 31 December 2015 (21.0% at 31 December 2014) and there is less reliance on more expensive Treasury deposits which represented 42.7% of total deposits as at 31 December 2015 from 60.6% a year earlier.

 Atlas Mara’s support of its local banking entities, as evidenced by their ability to raise deposits, has become more tangible – larger deposit sizes, at reduced rates, for longer tenors – have all contributed to improved margins. Benefits are evident across the network with cost of funds reducing by between 40bps and 320bps across BancABC countries from December 2014, with the exception of Zambia where local currency liquidity pressures across the market continue to negatively impact the cost of funds.

 A comprehensive programme to strengthen Atlas Mara’s subsidiaries’ end-to-end credit processes has been implemented, which will continue to benefit the group meaningfully going forward in terms of sustained and profitable loan book growth. Early successes of this focused program include 2015 asset recoveries of $18.1 million which contributed to reduce the profit and loss charge for the year to $12 million, a decrease in NPL ratios and increasing coverage ratios.

 A number of innovative new products were launched in 2015, notably: an “e-voucher” program for small scale farmers in Zambia, supported by the Zambian government, which is aimed at providing enhanced access to agricultural inputs, pre-paid cards for pensioners, also supported by the Zambian government, whereby registered pensioners’ monthly disbursements get loaded directly onto their BancABC cards, and a chip-and-pin co-branded fuel card in partnership with Puma Energy in Zambia. The appointment of Chidi Okpala as our Chief Digital Officer at the beginning of 2016 will accelerate execution of our market share growth strategies and investment in new innovative and disruptive initiatives.

 The Company announced the acquisition of a majority of Banque Populaire du Rwanda Limited (“BPR”), Rwanda’s second largest bank, with the transaction completing in early in 2016. Integration and rebranding plans are being implemented and we are excited about the growth opportunities for us in this market. We are working to close a second acquisition, Finance Bank of Zambia (“FBZ”), as soon as possible, consistent with conditions precedent being met or mitigated. We will merge FBZ with our existing Zambian asset, BancABC Zambia. Upon combination, it will result in the creation of Zambia's largest bank by branch network and fifth largest bank by assets.

 The Group continued to attract high calibre talent with significant new hires made throughout the year and into 2016, bolstering our executive team. Michael Christelis (exBarclays Africa) joined as Head of Treasury and Markets. Eric Odhiambo (ex-Citibank) joined as Chief Risk Officer. Jonathan Muthige (ex-Pick n’Pay and Standard Bank) joined as Head of Human Resources. John-Paul Crutchley (ex-UBS & Barclays) joined as Head of Investor Relations. Chidi Okpala (ex-Bharti Airtel) joined as Chief Digital Officer.

Page | 2  Brand endorsement strategy was rolled out across BancABC wherein “part of Atlas Mara” with the Atlas Mara logo now appears on BancABC communications and infrastructure.

Arnold Ekpe, Chairman of the Board of Directors, said:

“2015 was a milestone year for Atlas Mara. Despite a challenging economic backdrop, we are pleased to have declared our first annual profit. Strategically, the building blocks are falling into place and I fully expect that 2016 will demonstrate further progress on our journey towards building sub-Saharan Africa’s premier financial institution which will deliver the returns and growth our shareholders expect.

We are mindful that 2015 was a difficult year for our shareholders given our stock price performance. Ensuring alignment between our leadership team and shareholders is a core principle at Atlas Mara. For this reason, our entire Executive Committee reinvested a substantial part of their after-tax 2014 cash bonuses in stock during 2015 and into 2016, purchasing an aggregate 199,928 shares at a cost of approximately $1.3 million.

For 2015, I, as Chairman, asked for my remuneration to be paid entirely in shares. All other non-Executive directors have agreed for their directors’ fees to be paid 50% in stock, 50% in cash and our CEO, John Vitalo, and CFO, Arina McDonald, have voluntarily agreed to forgo cash bonuses for 2015. As a consequence, their 2015 bonuses are down 50% versus 2014 levels, with their bonuses for 2015 taken entirely in stock.”

Commenting on the results, John F. Vitalo, CEO, noted:

“I am pleased with our operational progress and the tremendous talent we welcomed during the year. Our prime task in 2015 was to attract high calibre talent as well as reinforce, rationalize and integrate the businesses we have acquired to make them fit to deliver superior growth in the years ahead. Although much remains to be done, we are excited to see our efforts already beginning to make a positive impact on our performance.

While we expect 2016 to be another challenging year, our confidence in the thesis that existed at the time of Atlas Mara’s founding is unshaken: Prospects for the growth of financial services in sub-Saharan Africa remain robust. There is scope for a newlyestablished, innovation-driven, financial institution with access to capital, liquidity and funding to rapidly build scale, attract talent, earn strong returns and make a positive impact in the communities in which it operates. The significant steps we have made towards achieving our strategic objectives in the year 2015 are notable. In the year ahead, we will continue to build on this ground work and remain focused on executing on our strategy, while being conscious of the need to manage the balance between making investments and delivering value to our shareholders, customers, employees and other stakeholders.” Investor Conference Call Atlas Mara’s senior management will today be holding a conference call for investors at 9am EST / 2pm BST. There will be a presentation available in the Investor Relations section of the Company's website, http://atlasmara.com.

The Company will not be disclosing any new material information.

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- Conference ID: 92923894

- US: +16316215256 / +18669265708

- UK: +44 (0) 1452 560304 Contact Details Investors John-Paul Crutchley, +971 4 275 6000 Kojo Dufu, +1 212 883 4330 Media Teneo Strategy, +44 (0)20 7240 2486 Anthony Silverman About Atlas Mara Atlas Mara was listed on the London Stock Exchange in December 2013. Atlas Mara's vision is to create sub-Saharan Africa's premier financial services institution through a combination of its experience, expertise and access to capital, liquidity and funding. Its goals are to combine the best of global institutional knowledge with extensive local insights and to support economic growth and financial inclusion in the countries in which the Company operates.

Page | 4 Summary of Results Basis of Presentation The term "Atlas Mara", "the Company" or "Group" refers to Atlas Mara Limited and its subsidiaries and associates. This release covers the audited results of the Group for the year ended 31 December 2015.

Unless otherwise stated, the financial information set out as an annexure to this news release is presented in accordance with International Financial Reporting Statements, as adopted by the EU (IFRS), with results from subsidiaries and investments included from the effective date of acquisition.

Pro-Forma Basis In order to present the financial results of the Group for the whole of the year 2015, and to enable a more meaningful comparable twelve-month period of business operations as a basis for future reference and measurement of performance, the 2014 financial results are also presented on a Pro-Forma basis. The key assumption in restating the IFRS set of accounts is an implied date of consolidation of all the acquisitions made during 2014 as at 1 January 2014, as opposed to the actual date of completion. Note that BRD Commercial was a newly‐formed entity, thus, the financial results for its 3 months of operation remain unchanged as far as its inclusion in such restated Pro-Forma accounts for the Group are concerned. The treatment of UBN on a Pro-Forma basis is set out below. It should be noted that the Pro-Forma results are not audited numbers.

Segment Information Atlas Mara analyses its business operations across sub-Saharan Africa on a segmental basis as described below. This is in line with the execution of the Group's strategy of capitalizing on the strengths of three of the leading economic trade blocs in Africa namely, the Southern African Development Community ("SADC"), the East African Community ("EAC") and the Economic Community of West African States ("ECOWAS"). Unless otherwise stated, segment results are presented, per geography, on a Pro-Forma basis. The Group is also focused on operations through two key business lines centered around clients and related products and services, comprising retail and wholesale (corporate) business operations. Going forward, additional information will be provided with regard to the financial performance of these two key business lines within each of the geographic segments.

UBN Atlas Mara's audited consolidated results include its 31.15% equity accounted shareholding in UBN, held both directly and indirectly. The effective 9.05% investment, held through ADC, was accounted for on a fair value accounting method from 1 September 2014. 21.16% further acquisition of UBN shares have been accounted for on an equity method basis with effect from the closing of the previously announced purchase on 19 December 2014. The Pro-Forma Atlas Mara accounts, in turn, account for the 31.15% associate investment in UBN on a full equity‐ accounted basis.

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(1) Constant currency variances reflect the operational variance (either positive or (negative)) period-on-period excluding the impact of foreign currency translation, due to the U.S. Dollar strengthening against all of the relevant African currencies. By way of example: Total Income for would have reflected positive growth of 24.6% compared to the prior period had it not been for the impact of foreign exchange translation.

(2) FY 2014 numbers are shown on a Pro-Forma basis as if the acquisitions were made at the beginning of the financial year. Pro-Forma numbers are reviewed but not audited figures.

(3) Key performance indicators are not audited figures.

Page | 6 Chief Executive Officer's Review We achieved several critical milestones on our way to building sub-Saharan Africa’s premier financial institution during 2015. Although we have more work to do, the progress is exciting.

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