Growth in Total Income Pushes Barclays Bank Profit After Tax to KSh.7.4 Bn

Barclays Kenya on Monday announced the full financial year results, which reported a profit after tax of 7.4 billion shillings for the period ended 31 December 2018, a growth of 7 percent compared to a similar period in 2017.

The lender’s performance was attributed mainly to a 5 percent growth in total income; however, it was partly offset by a 2 and 24 percent growth in cost and impairment, respectively.

By creating shared value for all of its stakeholders and delivering a strong financial performance, Barclays bank has grown its total assets by 20 percent to 325 billion shillings.

Customer deposits, on the other hand, rose to 207 billion shillings, a 12 percent growth with transactional accounts constituting 68 percent of the total deposits. All business segments recorded double-digit growth year on year.

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Driven by key focus products such as scheme loans, general lending, trade and mortgages that recorded strong growth year on year, Barclays Bank Kenya’s net customer loans grew by 5 percent to close at 177 billion shillings.

The Bank’s deployment of excess funding was underpinned by investment in government securities & dealing securities book which increased by 37 percent to 93 billion shillings

During the period under review, total income increased by 5 percent to 31.7 billion shillings. Non-funded income went up by 15 percent year on year was driven by growth in foreign exchange earnings, Bancassurance income, and bond trading income.

Costs

The bank managed its costs at 17.2 billion shillings reflecting 2 percent increase year on year, below inflation.  inclusive of

Adjusted for investments incurred to meet the Voluntary Exit Scheme (VES) program as well as the separation costs from the ongoing brand and name change activities, the bank recorded a 2 percent drop in costs for the period.

The drop in costs is attributed to increased efficiency resulting from strategic cost-save initiatives such as automation of our processing centers, investment in alternative channels, branch upgrade and rationalization programmes.

The savings derived were used to fund sustainable investments, especially in automation and digitization.

READ KCB Registers 24 Billion Shillings in Profits for 2018

Impairment

The lender’s impairment increased by 24 percent compared to a similar period in the previous financial year. This was largely attributable to the adoption of IFRS 9 as well as a few client names.

“We, however, registered a significant improvement in upstaging the levels of underwriting standards as well as internal efficiencies on the collections and recoveries fronts,” Jeremy Awori, Barclays Bank of Kenya Chief executive said.

The Bank’s average loan loss ratio stood at 2.2 percent from1.8 percent in 2017 and Net NPL ratio grew to 2.4 percent from 2.2 percent in 2017 while the statutory provisions remained null; an indication of adequate provisioning way above the regulatory guidance.

Capital & Liquidity

The bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement; total capital adequacy ratio at 16.4 percent and liquidity reserve position at 35.7 percent against the regulatory limits of 14.5 percent and 20 percent respectively.

“2018 was a strong year for our business. We recorded the fastest growth in a decade on some key performance metrics, a testament that our strategy is delivering results and that our collective efforts are yielding positively. We have an exciting agenda in 2019 to accelerate the growth of our business by delighting our customers and collaborating with all our stakeholders to bring possibilities to life,” concluded Mr. Awori.  Awori said