This archive report was first published on 31 July 2019.
Barclays Bank of Kenya is undergoing a significant transformation, marking a new chapter in its 104-year history in the country. The bank will soon adopt a new identity as Absa Bank, a move analysts describe as a historic event.
According to a report by Apex Africa Capital, Barclays Bank Kenya offers the highest dividend yield in the banking sector at 10.6 per cent, significantly higher than the one-year Treasury bill yield of 8.6 per cent. This has added to the allure of the counter among investors, cushioning it against cyclical market shocks.
Published on July 31, 2019, the report also highlights the bank's strong financial performance, with net profits increasing by 7.1 per cent to KSh7.4 billion in 2018. The bank's net interest income remained largely unchanged at KSh22 billion, while its non-interest income grew by 14.7 per cent to reach KSh9.7 billion.
Researchers at Apex Africa Capital anticipate a strong performance in the bank's stock at the local bourse, driven by the increasingly attractive dividend yield. The report notes that the bank's transition to Absa will have minimal effect on its capital ratio, as most of the rebranding expenses will be absorbed by the parent firm Absa Africa Group.
Barclays is expected to benefit from its heavy investment in digital platforms, with its digital platform – Timiza – set to improve efficiency in service delivery and increase the volume of transactions. As a result, the bank's revenues from fees and commissions are expected to grow exponentially in the coming years.
