Barclays Bank of Kenya has reported an 8% increase in profit after tax for the half year period ending June 2015. Net profit rose from KES 4.2 billion in June 2014 to KES 4.6 billion on theback of increased earnings from non-interest income lines. 

Non-Interest income grew by 12% to KES 4.8bn from KES 4.3bn supported by new revenue streams such as bancassurance. Total assets grew by 10% to KES 235bn compared to KES 213bn in the corresponding period in the previous year while impairments remain well controlled amounting to KES 586m which is 0.9% of the average gross advances-underscoring the quality of the asset book.

Highlights of the Financial Results include:

• 4% growth in Net interest income growth to KES 10bn (2014: KES 9.7bn) on the strength of growth in interest earning assets.
• 10% growth in customer deposits to KES 163bn (2014: KES 148bn)
• Strong Core Capital ratios at 16.4% against a regulatory limit of 10.5%.
• Total Capital ratios at 19.0% against a regulatory limit of 14.5%.

Income

Net interest income increased by 4% to KES 10 billion, up from KES 9.7 billion in the same period last year. This was largely due to growth in interest earning assets despite the pressure of declining interest
margins.

Non-Interest Income went up by 12% to KES 4.8 billion, up from KES 4.3 billion. New alternative revenue streams such as bancassurance, mortgage and asset finance Centres of excellence contributed to this
growth.

Capital

The Board of Directors approved a Tier II capital injection in the form of a USD 50mn (Shs 4.5bn) subordinated loan from Barclays Africa Group which was drawn down in the first half of 2015. This led to an increase in the total capital to risk weighted assets to 19.0% which strategically positions the Bank for future growth.

Asset Quality

The ratio of non-performing loans to total loans at 3.5% is 150 basis points less than the industry average. In addition, the loan loss provision reduced by 19% (KES 134m) year on year. This is a reflection of the quality of assets maintained by the Bank.

Liquidity

Liquidity ratios are strong at 41% compared to the regulatory minimum of 20%. This healthy position provides the Bank with a strong base to meet customers’ needs in the second half of the year and beyond.

Interim Dividend

The Board is recommending the payment of an interim dividend of 20 cents per share.

New Revenue Streams
During the period under review, the Bank made significant investments in a number of new revenue streams including a Mortgage Centre, an Asset Finance Centre of Excellence, Bancassurance and Agribusiness to boost balance sheet growth.

“The launch of the Barclays mortgage Centre in the first half is already yielding positive results for the Bank. As at June, the value of Mortgage applications recorded was almost double what the Bank recorded during the whole of 2014. On its part, Bancassurance although still in its nascence is showing great promise and we expect that it will be a major contributor of our non-funded income line within the next 2-3 years” said the Bank’s Managing Director, Mr. Jeremy Awori.

The Bank is also rolling out a robust SME strategy to enable it to play a bigger role in the development of this important sector of the economy. As a demonstration of its commitment to support the growth of this sector, the Bank has set aside a KES 30 billion kitty to lend to local enterprises.

Barclays is also set to announce a partnership with the Ministry of Devolution and Planning to provide LPO financing to women, youth and persons living with disability. The Bank has also set up an agribusiness unit to tap into the significant potential in this space.

Customer Service

The first half of the year saw the Bank enhance customer experience through roll out of new products and enriched digital channels functionalities, installation of new intelligent ATMs and reduced service time at the branches through an improved queue management system. As a result, the Bank has received various awards such as the most prestigious Bank in Kenya, best retail Bank in Kenya and best product in Africa (Zidisha).

Conclusion

Barclays Kenya moves into the second half of 2015 with a continued commitment to strengthen partnership with the Government and entrepreneur ecosystem, strategic customer focus and enhancement of digital channels. Mr. Awori thanked the Board, management team and the employees for their dedication and efforts in first half, and Barclays Bank of Kenya’s customers for their continued support and the confidence they have in the Bank.

About Barclays

Barclays is a major global financial services provider engaged in personal Banking, credit cards, corporate and investment Banking and wealth and investment management with an extensive international presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way.

With over 300 years of history and expertise in Banking, Barclays operates in over 50 countries and employs approximately 140,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.

For further information about Barclays, please visit our website www.barclays.com