Atlas Mara Ltd., the bank acquirer that’s been battered by an economic slump across sub-Saharan Africa, has turned to one of the businesses co-founder Bob Diamond knows best to boost revenue: currency trading.

Thank you for reading this post, don't forget to subscribe!

An “exceptional performance” from “customer flow forex trading” helped to push Atlas Mara’s total revenue up 15 percent to $177 million for the first nine months of 2016, the company said in a statement Tuesday. Started by the former chief executive officer of Barclays Plc, Atlas Mara has found a profitable niche in volatile currencies like the Mozambique metical and Botswana pula, helping it overcome mounting bad loans and make $4 million in net income for the period.

Diamond is looking for ways to restore confidence in Atlas Mara, which has lost 72 percent of its value since selling shares to the public three years ago to buy up stakes in banks across sub-Saharan Africa. In turning to a currency trading business being built up in Dubai, the company is flashing back to Diamond’s rise building a fixed-income empire at Barclays, and to the probes and fines he left in his wake four years ago.

“This is a business we know really well,” Atlas Mara CEO John Vitalo said on a conference call he and Diamond hosted Tuesday, which featured no questions from investors or analysts. “This is a business we’re really excited about. It’s got huge potential.”

Revenue Doubles

Atlas Mara’s Global Markets & Treasury unit, or GMT, more than doubled revenue to $26 million for the nine-month period, the company said in a presentation. Diamond’s firm is now pulling off 1,800 currency trades each month, compared with 800 each month last year, the presentation shows.

The company, incorporated in the British Virgin Islands, has been struggling to make money from lending amid a slump in sub-Saharan economic growth and a decline in the currencies of some of its key countries against the U.S. dollar. Yet some of these conditions created opportunities for the GMT unit.

“The growth in forex trading was mainly from Botswana, Mozambique and Zimbabwe, which benefited from higher trading volumes and wider margins as a result of volatility in the currency exchange market,” according to the presentation.

Zimbabwe uses the U.S. dollar and imports a lot of its products from South Africa, where the rand whipsawed against the greenback this year. The Mozambique metical has weakened 38 percent this year, the most of 24 African currencies tracked by Bloomberg. Botswana’s pula is pegged to a basket of currencies including the rand, Japanese yen, Euro and British pound, all of which have been impacted by the U.K.’s decision to leave the European Union and speculation around U.S. interest rates.

Soured Loans

The trading performance helped offset declines in lending to small and medium-sized businesses, individuals and corporations. Net interest income slid about 4 percent to $76 million while losses on soured loans jumped by more than 50 percent to $13.3 million. The stock was unchanged at $3 by 8:50 a.m. in London on Wednesday. It jumped 4.4 percent on Tuesday, rebounding from a record low in the biggest one-day increase since Sept. 20.

The risks involved in the trading business mean it shouldn’t become central to Atlas Mara’s operations, said Kato Mukuru, the former head of equities research at Exotix Partners LLP.

“This should be add-on at best,” Mukuru said. “If Diamond wants to grow the business, he needs to grow deposits and grow the loan book and improve the quality of the loan book.”

Diamond and Vitalo announced an overhaul of Atlas Mara in August in a bid to cut millions of dollars in expenses. The company also “accelerated growth plans” for the GMT unit to “deliver the level of revenue growth our investors expect,” according to a company report for the first half of 2016.