• Revenue grew by 8% to Kshs. 31.7 billion despite the impact of the interest rates law in Q4
  • Customer asset book grows by 16% to Kshs.169 billion; Corporate and SME businesses register 33% and 25% growth respectively.
  • Strong performance by new business lines such as bancassurance and fixed income trading
  • A turbulent macro-economic environment and the implementation of a more prudent impairment model results in Kshs3.9 billion impairment charge
  • Customer deposits up 8% to Kshs.178 billion mainly driven by savings and transactional accounts.  


Barclays Bank of Kenya has today announced a PBT of Kshs. 10.8 billion for the period ended 31st December 2016 driven by an impressive 16% growth in its loan book. This was mainly driven by a 33% and 25% growth in the corporate bank and SME books respectively and is testament to the bank’s commitment to driving lending in order to support the growth of businesses in Kenya.

The performance was however impacted by an increase in impairment as well as the implementation of the Banking Amendment Act in Q4.

During the period under review, impairment grew due to a turbulent macro-economic environment which caused heightened job losses resulting in higher than usual default rates especially in unsecured personal loans. The growth in impairment was also driven by the early adoption of some aspects of the more conservative global accounting model referred to as International Financial Reporting Standard (IFRS) 9.

“We have instituted corrective measures to contain impairment and they are beginning to bear fruit. We have invested in people, processes and systems to manage our impairment better. These initiatives are enabling us to identify distressed clients early enough and consequently come up with a repayment model that takes into account our clients’ prevailing circumstances,” said Mr Awori.

Total Revenue
Revenue grew by 8% to Kshs. 31.7 billion on the back of strong performance of new income lines, such as bancassurance, fixed income trading, and customer assets which recorded a 16% growth.

Net Interest Income
Net interest income grew by 9% to Kshs.22 billion, up from Kshs.20 billion in 2015. This was driven by a growth in interest earning assets despite the pressure of declining net interest margins due to the regulation of interest rates.

Non-Interest Income
Non Funded Income grew by 3% largely supported by Bancassurance, FX income and Fixed income Trading, proof that the bank’s diversification strategy is on course.

Customers Deposits
Customer deposits grew by 8% to Kshs.178 billion with significant contribution coming from savings and transactional accounts which make up 80% of our deposits (79% in 2015). Business Banking and Corporate segments recorded double digit growth in the period under review.

Costs
Costs went up by 8% from Kshs.16 billion to Kshs.17 billion due to inflationary adjustment on staff costs and increased investments in technology, new channels such as agency banking and the refurbishment of existing channels (branches and ATMs) to deliver excellent customer experience.

The cost to income ratio remained steady at 53%. We continue to manage our costs effectively as we create efficiencies.

Capital & Liquidity
Our capital and liquidity ratios are strong with sufficient headroom above the regulatory requirements. We are very well positioned to support future growth in line with our medium to long term strategy.

Looking ahead
“We are investing heavily in the automation and digitization of our systems, processes and solutions in a bid to make our institution more efficient as well as to provide our customers with convenient access to our solutions at an affordable rate,” said Mr. Awori.

“We will continue to ramp up our digital agenda in order to grow our online, and mobile banking channels with the aim of significantly increasing the percentage of customers using digital services in the next 3 years. We also plan to increase our agency banking outlets during the same period with the number of transactions in these outlets expected to rise by over 250%,” he added.

“Through our shared growth, we will continue to invest in initiatives that support our communities to gain economic independence because we know that as they grow, we grow and we all prosper!” he concluded.

Conclusion

Mr. Awori thanked the Board of Directors, employees, customers, regulators and shareholders for their continued support