Barclays sees up to 20pc revenue dip on interest cap law
Barclays Bank of Kenya managing director Jeremy Awori (left) and Board Chairman Charles Muchene during the bank’s Annual General Meeting at Barclays Sports Club in Nairobi on April 28, 2017. PHOTO | SALATON NJAU | NMG
Banks have been forced to send staff home as they try to cut costs and improve efficiency.
Barclays Bank of Kenya #ticker:BBK (BBK) is projecting a 15 to 20 per cent drop in revenue for this year, attributing the trend to the law capping interest rates.
This comes just days after another NSE-listed lender, Kenya Commercial Bank #ticker:KCB (KCB), said its net interest margins will fall by at least 1 per cent in 2017 owing to the same.
“We don’t know what the future holds with regard to this law,” Jeremy Awori, the managing director of the bank said Friday at the lender's annual general meeting.
Bankers remain pessimistic that future projections will get better, predicting tougher days to come.
“We project 15-28 per cent impact on revenue. The key challenge is how to balance and diversification into other streams such as bank assurance and stick broking,” Barclays chief financial officer Yusuf Omari said.
Banks have been forced to send staff home as they try to cut costs and improve efficiency following digitisation of some core banking functions and falling revenues.
KCB recently retrenched 223 staff while Barclays sent 171 of their staff packing last year.
