NAIROBI, KENYA, NOVEMBER 22 — Barclays Bank of Kenya has recorded a 2.1 per cent increase in net profit for the year to September 30, as investments in government securities paid back.
The Nairobi Securities Exchange (NSE) listed lender’s profit after tax closed the third quarter at Ksh5.44 billion up from Ksh5.33 billion in a similar period last year.
Interest income from government securities grew 34.7 per cent to Ksh5.55 billion, compared to Ksh4.12 billion it made last year.
This is in the wake of increased investments in government papers by banks as they continue to navigate the interest rate capping law environment, which has reduced lending to individuals mainly SMEs who are considered high risk borrowers.
Interest income from loans and advances recorded a trivial 0.8 per cent growth to Ksh16.02billion from Ksh15.90 billion.
This is evidenced by the slow expansion of the bank’s loan book(loans and advances to customers), which closed the nine months at Ksh178.43 billion, a 6.7 per cent difference compared to Ksh167.25 billion recorded last year.
Total interest income for the period was Ksh21.67 billion compared to Ksh20.13 billion posted last year, a 7.7 per cent increase.
The subsidiary of Barclays Africa Group, which has parted ways with Mother Company and British multinational bank- Barclays PLC, saw customer deposits grow 9.9 per cent to Ksh220.25 billion.
This is up from Ksh200.37 billion recorded in a similar period last year.
During the period under review, the lender cut on its insider lending as total loands and advances reduced to Ksh10.93 billion from Ksh12.11 billion last year.
This is credit advanced to Employees, directors,shareholders and associates.
Gross Non-Performing Loans (NPLs) however increased 22.2 per cent to Ksh14.59 billion from Ksh11.94 in a corresponding period last year.
The lender also recorded increased costs as total operating expenses went up to close the period at Ksh16.13 billion, compared to Ksh14.89 billion in a similar period last year.
This is despite a 7.9 per cent reduction on staff costs which dropped to Ksh7.46 billion from Ksh8.10 billion. The reduced costs comes with the staff redundancy exercise at the bank which saw it shut down 12 branches last year, remaining with 89 branches at close of the year.
Directors emolument however slightly increased to Ksh113.34 million from Ksh104.11 million.
Barclays grew its assets by 15.9 per cent in the nine months to close a total Ksh322.23 billion, up from 277.97 billion.
Barclays however trails it’s tier-1 peers in profit for the similar period where KCB Group posted a net profit of Ksh18 billion, Equity Group Ksh15.8 billion and the Co-operative Bank which reported a Ksh10.3 billion net profit for the year to September 30.
Meanwhile, Barclays Kenya is mulling over the impending name change after its African parent company Barclays Africa changed its name back to Absa in July after the exit of Britain’s Barclays Plc.
The name change came after Barclays sold most of its controlling stake in Absa, South Africa’s third-largest lender, ending more than a century of the British bank’s involvement in Africa.
Absa is the current brand name for the group’s retail banks in South Africa and plans are underway to have all its subsidiaries across the continent adopt the new name.
The lender has up to 2020 to completely drop the Barclays brand in its Africa operations.
“The change will happen overtime. We will choose the most appropriate timing but I can assure you that the process will not be rushed,” Barclays Kenya Managing Director Jeremy Awori recently told investors. “We have until 2020.”