Barclays Bank of Kenya Posts 10.2 Percent Depression in HY16 PAT

Barclays Bank of Kenya posted a 10.2% y-o-y decline in profits after tax to KES 4.1Bn, on account of a significant surge in loan loss provisions (+242.9% to KES 2.0Bn) and a 459.1% rise in directors’ costs. Net interest income and non-interest income reported average growth rates of 10.5% and 7.4% y-o-y.

The lenders operating expenses recorded a modest growth of 24.2% to KES 10.4Bn, resulting in a cost to income ratio of 51.8%; which stands out as one of the highest among the listed lenders. The bank’s agency banking already kicked off well, though it’s still unclear as to who will purchase the 50.1% Barclays Plc. stake in BAGL.

Equities

The week kick started on a low note with all indices pointing south. The NASI declined by 4.05% to close at 133.50 points, while the NSE-25 share index displayed a similar trend, retreating by 7.02%, to close at 3444.44 points. NSE 20 share index lost 5.63% to close at 3123.54 points, weighed down by the sustained losses on the banking sector.

Shareholders’ wealth contracted further by 4.06% to settle in at KES 1,922.42Bn, while the equity turnover bucked the trend advancing 151.19% to close trading at KES 1.93Bn, on account of higher volumes traded.

The market has continued being battered by worsening investor sentiments, following the news on interest rate cap on bank loans and deposits.

Read: Equity Bank Posts KES 10.1Bn Profit in 2016 Half year results

 Currencies:

Varied movements were exhibited by currencies trading today, with the shilling strengthening against the Great Britain Pound, while weakening against the US Dollar and Euro. The USD lost a meagre 0.01%, while the Euro lost 0.35%. The weakening on the dollar is attributed to anticipated end month dollar demand from sectors like energy and telcos.  We opine that, the shilling will hold steady and trade around similar levels, propped by the Central Bank’s interventions in the money markets, in case of any volatility.