NAIROBI, AUGUST 14 ― Barclays Bank of Kenya has posted an 8.6 per cent growth on its half-year profit, reaping from its investment in government securities and interest from its growing loan book.
The tier-one lender has announced a Ksh3.8 billion after-tax profit for the six months to June 30, an increase from Ksh3.5 billion it reported in a similar period 2017.
Loans and advances to customers jumped 7.5 per cent, growing its loan book to Ksh176.1 billion up from Ksh163.8 billion last year, defying the interest rate cap in the market which has been blamed for slowing down the credit market in the country.
The Nairobi Securities Exchange listed lender also recorded a 14.9 per cent growth on customer deposits which closed the six months at a total Ksh216.8 billion, compared to Ksh188.7 billion it held a similar period last year.
Interest income from loans and government securities rose 0.6 per cent and 35.9 per cent earning the bank Ksh10.55 billion and Ksh3.52 billion respectively, up from Ksh10.49 billion and Ksh2.59 billion last year.
Total interest income, including that from deposits and placements with banking institutions, closed the half-year at Ksh14.14 billion up from Ksh13.14 billion last year.
The bank’s operating expenses during the period under review however went up 6.1 per cent to Ksh10.4 billion compared to Ksh9.8 billion last year.
The expenses include staff costs and directors’ emoluments which consumed Ksh5.10 billion and Ksh74.5 million respectively, up from Ksh5.05 billion and Ksh73.2 million the bank spent in a similar period last year.
Non-Performing Loans at the lender also went up to Ksh14.4 billion from Ksh11.9 billion last year.
During the period, BBK cut lending to staff and directors as insider loans and advances reduced to Ksh11.1 billion compared to Ksh12.6 billion last year.
“The board of directors has resolved to declare an interim dividend for the year 2018 for Ksh0.20 per ordinary share of the company to be paid on or about October 12, to shareholders registered at close of business on September 7,” the bank said in its financial statement.
The lender had reported an eight per cent growth in the first quarter of this year where net profit grew to Ksh1.88 billion, up from Ksh1.74 billion in a similar period last year, buoyed by an increase in interest income.
Meanwhile, the bank continues to mull over the impending name change after shareholders of parent company- Barclays Africa Group gave the green light to the group to change its name to Absa Group in July.
The move will see Barclays Africa Group shed-off the British multinational bank- Barclays PLC corporate image. Barclays Kenya has until June 2020 to rebrand.
“The change will happen overtime. We will choose the most appropriate timing but I can assure you that the process will not be rushed,” managing director Jeremy Awori said during a recent briefing on the changes.