Barclays Bank of Kenya #ticker:BBK Wednesday reported a normalised profit of Sh6.2 billion after tax for the nine months ended September 2019. However, this was reduced to Sh5.56 billion by the one-off rebranding costs and flat interest income growth.
The Tier I lender, which expects to complete its rebrand to Absa Kenya by June, said it spent Sh910 million on the transition costs, which was recognised as an exceptional item on its bottom line in the period.
The bank said it will use this normalised profit as the basis of calculating dividend for its shareholders at the end of the year. This is designed to help it maintain a fair dividend pay-out to minority shareholders over the transition period.
“To ensure the financial performance is comparable and to report the progress on the underlying business, Sh910 million has been reported as an exceptional item relating to the spend on transition to Absa,” said Barclays in a statement yesterday.
The lender said that it has successfully migrated key technology systems that were previously hosted in Barclays UK and expects to introduce Absa’s brand colours on local installations in the next few months.
The British multinational reduced its stake to 14.9 percent in South Africa’s Absa Group, its former subsidiary through which it owned the Kenyan bank and nine other lenders on the continent including in Botswana, Ghana, Uganda and Zambia.
In the period under review, Barclays Kenya relied on growth in non-interest income and lower costs to grow its bottom line, as interest income growth remained flat. The bank cut its total expenses by 2.7 per cent to Sh15.7 billion, while non-interest income went up by 8.1 percent to Sh7.95 billion.
Net interest income grew at a slower pace compared to the fees and commissions, at two percent to Sh16.83 billion.
This was despite the loan book expanding by Sh15.8 billion to Sh194.2 billion, and its stock of government securities going up by 15.2 percent or Sh15.6 billion to Sh118.5 billion.
Customer deposits rose by Sh15.2 billion to Sh235.4 billion, raising interest expenses by 11.5 percent to Sh5.03 billion, which lowered the net interest income of the bank.