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Atlas Mara, a London-listed private equity firm that invests in African banks, reported on Wednesday a sharp drop in its half- year profit due to weak currencies, declining macroeconomic conditions, and market illiquidity across Africa.

The company said after-tax profit fell 33.9 percent to $1.2 million in six months to June 30th compared with $4.2 million a year earlier.

“Atlas Mara faced a particularly difficult operating environment in the first half of 2016,” said John Vitalo, Atlas Mara’s CEO. “The full impact of the decline in African currencies, a worse macroeconomic backdrop and market liquidity tightness across a number of our countries of operation have all presented particular challenges to profitability.”

Atlas Mara said revenue, however, rose 34.5 percent to $113.5 million in H1 2016 from $98.8 million a year earlier, driven mainly by improved performance in the company’s operations in Botswana and Rwanda.

During the period under review, Atlas Mara said it executed a bank-wide cost reduction effort to align its cost base to the current revenue environment.

“We expect to reduce headcount by 30% - 35% across our Shared Service and Centre and reduce non-staff central costs,” Vitalo said. “We expect this to lead to a decline in the run-rate of our operating expenses of $8 million on a full year basis from 2017 and we continue to look for further opportunities to reduce costs.”

Atlas Mara said non-performing loans declined to 13.2 percent in H1 2016 from 14.6 percent as at December 2015, but credit impairment charges rose to $9.1 million in H1 2016 from $6.1 million a year earlier.

In Nigeria, where Atlas Mara owns 31.15 percent of Union Bank of Nigeria (UBN), the company said its income rose to $12.5 million in H1 2016 from $10.5 million a year earlier.

However, Atlas Mara said it recorded a foreign exchange loss of about $87 million due to the impact of the naira devaluation on the company’s investment in UBN. This caused Atlas Mara to report a decline in equity to $577.3 million in H1 2016, down 12.5 percent a year earlier.

“We see positive medium-term growth potential for UBN irrespective of the near-term challenges from the macroeconomic environment,” the company said.

Atlas Mara said total assets rose 28.1 percent year-on-year to $2.95 billion driven mainly by higher customer loans, allowed by a 37.9 percent year-on-year growth in retail deposits.

“We expect a better operational performance from our businesses during the second half of the year as the cost and revenue initiatives that we have implemented begin to deliver results,” Vitalo said.

Atlas Mara was founded in 2013 by Bob Diamond, the former CEO of UK-based Barclays Plc, and Ashish Thakkar, the 34-year-old billionaire CEO of the Mara Group. The company has operations in seven African countries including Nigeria, Rwanda, Botswana, Zimbabwe, Tanzania, Zambia, and Mozambique.