- Customer Loans and advances grew by 5% to Kshs167 billion
- Customer deposits grew by 11% to Kshs.200 billion
- Impairment registered a 26% drop from Kshs.3.1 billion to Kshs.2.3 billion
- Capital adequacy ratio remained solid at 18% against a regulatory limit of 14.5%
- Liquidity ratio of 38% against the regulatory minimum of 20%.
Barclays Bank of Kenya Ltd has today reported a profit before tax of Kshs.7.7 billion for the period ended 30 September 2017, in a period characterised by harsh economic conditions, political uncertainties and the impact of interest rates caps that came into law in September 2016.
The bank posted a 5% growth in the customer loans to Kshs.167 billion which was mainly driven by a 5% and 8% growth in the Consumer bank and SME bank businesses respectively. Key focus products namely Scheme Loans, General lending and Assets Finance recorded double digit YoY growth.
Customer deposits grew by 11% to Kshs.200 billion mainly driven by transactional accounts following the launch of new products such as the Twin Account. The transactional accounts balances accounted for 71% of the deposits up from 61% in the previous period; this resulted in the average cost of funds dropping to 2.4%.
Impairment recorded a 26% drop from Kshs.3.1 billion in 2016 to Kshs.2.3 billion this year which is largely attributed to concerted efforts to attain the highest level of underwriting standards as well as enhanced internal efficiencies on the collections and recoveries fronts.
Performance for the period was however impacted by a 4% decline in net interest income to Kshs.16.1 billion resulting in an 8% reduction in total revenue to Kshs 22.6 billion. This is largely due to the impact of the interest rates’ law that resulted in yields on interest earning assets declining from 14.2% to 12.6% and net interest margin (NIM) dropping to 9.3% from 10.0% in September 2016.
“This year has presented us with a multiplicity of challenges on the macro-economic and political fronts which have had a direct impact on our revenues. The prolonged electoral period has presented a climate of uncertainty which has been challenging for businesses whilst the interest rates law continues to undermine our interest income. We are however optimistic that both of these situations will be resolved soon,” said Jeremy Awori, Managing Director, Barclays Bank of Kenya.
“In the interim, conscious of the highly dynamic and fluid operating environment we find ourselves in, we now have to develop innovative solutions faster than before in order to address our clients’ needs and therefore remain relevant. Having said that, I am glad to note that the bank registered growth on most of the key products which is an endorsement of our strategy underpinned by an ambitious product diversification plan and enhanced efficiencies,” he added.
Other Highlights include:
The bank managed to retain its costs flat year on year despite inflationary adjustments and investments. We continue to manage our costs with a number of running initiatives to create efficiencies. Top of these initiatives include automation of our processing centres, investment in alternative channels and branch rationalisation programmes.
Our innovation and digitisation agenda is in top gear and is aimed at moving the bulk of transactions to channels such as mobile banking, internet banking and agency banking. Non branch transactions stood at 64% up from 45% as at close of 2016.
Capital & Liquidity
The bank continues to post very strong capital and liquidity ratios showing sufficient headroom above the regulatory requirements - Our total capital adequacy ratio at 18% and liquidity reserve positions at 38% against the regulatory limits of 14.5% and 20% respectively.
We are therefore well positioned to support future growth in line with our medium to long term strategy.
For more information please contact:
Barclays Bank of Kenya
+254 722 217 692
About Barclays Bank of Kenya
Barclays Bank of Kenya is one of Kenya’s leading financial institutions. Established in 1916, Barclays has been a major player in Kenya’s financial landscape engaged in personal banking, Enterprise, credit cards, corporate and bancassurance. The bank offers end to end financial solutions to retail, enterprise and corporate customers and its regional and global footprint enables it to offer cutting edge financial solutions to its clients. The bank is a leader in the credit card space. It has also been associated with a number of market firsts including the launch of the first ATM, Sharia Banking and unsecured lending. The bank has presence in 38 counties. It has 89 branches, 217 ATMs, over 370 Agency outlets and a robust Internet and Mobile Banking platform. The bank’s purpose is to help people achieve their ambitions – in the right way.
For further information about Barclays, please visit our website
About Barclays Africa Group
Barclays Africa Group Limited (“Barclays Africa” or “the Group”) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest financial services groups. Barclays Africa offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management and insurance. The Group operates in 12 countries with approximately 40,000 employees, serving close to 12 million customers.The Group registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa), Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.
For further information about Barclays Africa, please visit www.barclaysafrica.com