Barclays net profit rises 7pc to Sh 7.41bn on higher non-interest income

Jeremy Awori at Timiza
Barclays Bank Kenya managing director Jeremy Awori at a producr launch in March 2018. PHOTO | SALATON NJAU 

Barclays Bank of Kenya (BBK) #ticker:BBK has recorded Sh7.47 billion after-tax profits for last year, representing a 7 per cent rise in year-on-year profitability that resulted largely from higher non-funded income.

Barclays, the third Kenyan bank to announce its full-year results, saw its non-interest income, which comprises fees and commissions, dividend income and foreign exchange income, rise by Sh1.24 billion representing a 14.7 per cent jump to close the financial year at Sh9.7 billion.

The lender's net interest income -- including loans to customers and government securities –- remained largely flat, rising by Sh190 million, or the equivalent of 0.8 percent, to Sh21.99 billion.

The tier-one lender closed the year with a loan book of Sh177.35 billion, a 5 per cent jump from the previous year, while customer deposits increased 11.5 per cent to Sh207.4 billion.

The lender’s gross non-performing loans increased by Sh1.8 billion the equivalent of 14.88 per cent to Sh13.9 billion in the period from Sh12.6 billion the previous year as its loan loss provision, booked as an expense in the income statement, jumped 24.2 per cent to Sh3.87 billion.


The performance saw the bank declare a final dividend of 90 cents per share, bringing the total full-year payout to Sh1.1 per share representing a 10 per cent rise.

Change to Absa

BBK expects all its operations in Kenya will change their name to Absa Group Limited by end of 2019.

"We are slowly introducing our Absa brand. We have a process that will culminate in the full transition in 2020," Barclays Bank of Kenya chief executive Jeremy Awori said at an investor briefing.

"We are eyeing a complete rebranding by end of this year," Mr Awori added, stating that the parent group Absa would inject additional undisclosed capital to the Kenyan unit to cater for the transition costs.

This name change comes three years after UK-based Barclays Plc announced that it would be selling most of its 62 percent stake in the Johannesburg-based Barclays Africa Group over two to three years.

Barclays becomes the third bank after KCB Group #ticker:KCB and Stanbic Holdings to announce a growth in full-year results.

KCB, Kenya’s biggest bank by assets, on March 6 posted a 21.8 percent jump in net profit to Sh24 billion for the year ended December 2018, helped by lower operating costs and a drop in loan loss provisions.

Rise in earnings

Stanbic on March 1 posted 45.5 percent jump in net profit to Sh6.27 billion for the full year ended December 2018, buoyed by growth in both interest and non-interest income.

The results by the three lenders mirror the Central Bank of Kenya (CBK) indicators that show commercial banks recorded a rise in earnings last year.

Kenyan banks’ total pre-tax profits hit a record high of Sh152.3 billion last year, surpassing the previous earnings peak reported before the introduction of interest rate controls slightly more than two years ago, according to the CBK report.