Barclays Bank of Kenya Chief Executive Officer Jeremy Awori has expressed confidence that the institution’s balanced strategy for both top- and bottom-line growth to deliver strong shareholder returns is paying off.
“Our diversification strategy is working. Our revenue growth is coming through and we want to accelerate that revenue growth by investing in other areas that provide opportunities – bank assurance, SMEs, asset and corporate,” said Awori to the media after the bank released its Financial Results for 2016.
“We are investing heavily in the automation and digitization of our systems, processes and solutions in a bid to make our institution more efficient as well as to provide our customers with convenient access to our solutions at an affordable rate,” added Awori.
During the reporting period, the bank’s performance was however, impacted by an increase in impairment as well as the implementation of the Banking Amendment Act in Q4 which caused heightened job losses resulting in higher than usual default rates especially in unsecured personal loans.
Awori notes that this will not deter their focus.
“Continue to focus around where we take our risks where you lend and where you don’t lend and make sure you get a return on your lending. That has been a challenge, because before you could price on your risk now with the cap it is quite difficult because you cap just how much you can price that risk.
So the riskier customers are difficult to bank in this environment just because you cannot get that return for the delinquency and impairment that may come through banking that segment. So, we continue to look at where we see that opportunity where we shall get good return.”
Awori discloses that they have instituted corrective measures to contain impairment and they are beginning to bear fruit.
“We have invested in people, processes and systems to manage our impairment better One of the key things I noted since joining the bank was that the institution had underinvested in technology both towards innovation and the infrastructure that powers our operations.
We made a conscious choice to say, it is like having a house with a weak foundation. A lot of our investments have been around unsexy parts of technology. Changing computers, servers, routers, using more cost-effective equipment. Our current technology could not allow us to innovate, where we create solutions and plug them into our ecosystem. The refresh of our IT assets and technology such as ATMs places us ahead and will play a crucial role going forward.
That brings a better customer service. People can now deposit money 24 hours a day at their convenience, so, those to me are around offering a service and keeping your customers.”
“It is a competitive world, if you don’t disrupt yourself, someone else will do that, you better disrupt and retain some measure of control,” he emphasizes on the course the bank has taken.
Awori is also optimistic about the prospects of the Kenyan economy going forward besides the 2017 General Elections.
He says,” We are however working with different groups to try and ensure that we have peaceful elections, this I believe will help build confidence in Kenya as an investment destination. We simply cannot be working with a five-year investment horizon where you basically make your money between now and the next election as you don’t know what will happen after. In other markets elections come and go but businesses continue to operate as such we are looking at the leaders on both sides to be responsible during this period because in the end it will be better for the economy. Elections is one of the many factors that affect the industry and as such Barclays will stick to its five-year plan.”