BARCLAYS KENYA PROFITS SUGGEST WIDER GAINS IN BANKING SECTOR

Barclays Bank of Kenya posted a 17.7% rise in after-tax profits in 2018 on the strength of non-funded income.

The local subsidiary of Absa Group Limited told investors last week that it earned KSh7.416bn in 2018, a steady rise from KSh6.296bn posted in 2017.

• The bank’s non-funded income rose by 14.7%, while customer deposits increased to KSh207.4bn in what CEO/managing director Jeremy Awori called “the fastest growth in a decade on some key performance metrics”.

The lender’s total assets also grew to KSh325bn from KSh271.77bn, while its loan book grew by 5% to close the year at KSh177.35bn.

• The bank also declared a final dividend of 90 cents per share.

Traditional profit avenues vanish

In what has clearly been a tougher credit market for Kenyan lenders, Barclays’ net interest income rose by a paltry 0.8% in 2018.

The lender’s response to the rate cap included launching Timiza, a mobile lending app, and hiring a chief data officer.

• The bank processed 1.6 million loans worth KSh10bn through the mobile app in 2018, which also grew its customer base by three million.

Barclays, which has been in Kenya for more than a century, is currently the fourth largest bank in Kenya by asset base. It is in the process of rebranding to Absa Group Limited, a process that is also impacting its profits due to the one-off costs of rebranding.

Banking sector rebounding

Two other lenders, KCB Group and Stanbic Holdings, also recently announced growth in net profits.

• KCB posed a 21.8% increase in profit.
• Stanbic posted a 45.5% increase in profits to KSh6.27bn.

Other lenders are expected to follow suit in the next week as they race to meet the 31 March deadline to post their full-year results.

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