This archive report was first published on 29 August 2019.
On 30 June 2019, Barclays Bank of Kenya announced a normalised profit before tax of Kshs 6.3 billion, a 19% increase from the same period in the previous year.
The bank attributed the growth to a 4% increase in total income, a 3% reduction in operating costs, and a 4% decrease in impairment.
As part of its transition to Absa, Barclays Kenya invested Kshs 561 million in key modernisation projects, with the transition journey now 65% complete.
‘Our transition journey to Absa has now gained momentum and is about 65% complete. We are making significant investments in technology, branch modernisation and branding, which will ultimately enable us to give our customers a better banking experience,’ said Barclays Kenya Managing Director, Jeremy Awori.
During the period under review, total assets grew by 12% year on year, driven by growth in government securities and other liquid assets.
Customer deposits increased 6% to Kshs 230 billion, with growth seen across all businesses. Net customer loans grew by 6% to close at Kshs 187 billion, driven by key focus products such as general lending, asset finance, mortgage, and scheme loans.
Investments in government securities and trading increased by 22% to Kshs 114 billion. Total income increased by 4% to Kshs 16.3 billion, driven by the bank's core business and supported by non-financial income, which was up 13%.
The bank managed its costs well, with a reduction of 3% to Kshs 8.4 billion. Cost-saving initiatives included the automation of processing centres, investment in alternative channels, and branch rationalisation programmes.
Impairment decreased by 4% compared to the same period last year, largely due to an improvement in portfolio performance. The bank's average loan loss ratio stood at 1.8%, down from 1.9% in 2018, while the net non-performing loan ratio dropped to 2.3% from 2.6% in 2018.
Barclays Kenya's capital and liquidity ratios remain strong, with sufficient headroom above the regulatory requirement. The total capital adequacy ratio stood at 16.0%, and the liquidity reserve position was at 38.7%, against the regulatory limits of 14.5% and 20% respectively.
The bank reported separation investments of Kshs 561 million as an exceptional item, which will continue to be tracked under this line throughout the separation period.
