Finance Barclays Bank of Kenya half year profit grows by 6.2 per cent to hit $376 million

Finance Barclays Bank of Kenya half year profit grows by 6.2 per cent to hit $376 million

Barclays Bank of Kenya half year profit hits Sh3.76 billion. (sapeople) Barclays Bank of Kenya half year’s after-tax profit rose by 6.2 per cent on the back of increased lending to government and lower costs.

The bank’s net profit for the period ended 30th June 2018 was Sh3.76 billion, a growth of 6.2 per cent compared to a similar period last year.

During the period, total income increased by 5 per cent to Sh15.7 billion while net interest income posted a 4 per cent increase, mainly driven by growth in government securities book which grew by 62 per cent. Barclays Bank of Kenya Managing Director, Jeremy Awori. (Reuters UK) The bank also grew its lending to the government by nearly a third to Sh70 billion as the legal cap on lending rates made loaning to homes and business unattractive.

It earned an additional Sh1 billion from government securities to push earnings from state bonds and bills to Sh3.52 billion.

Earnings from lending to households and business remained flat at Sh10.54 billion despite its customer loans growing 7.9 per cent to Sh176.1 billion, underlying the impact government cap on lending rates. Central Bank of Kenya (Nairobi Business Monthly) Capping of interest rates to no more than four per cent above the Central Bank Rate (CBR) introduced in September 2016, saw lenders shy away from the private sector, instead choosing to do business with the government leaving consumers high and dry and at the mercy of shylocks.

As a result, the industry loan book growth slowed to 3.7% in the first half of 2017.

In the period, interest income declined 13% as the cost of funds reduced 14%. Absa Bank (Naija247news) Most banks reported lower earnings last year, but they, however, seem to have turned the corner this year based on half year and quarter one reports.

Meanwhile, Barclays Kenya expects to incur branding, real estate and transition expenses as it aligns to the Absa Group identity within the next two years

“In order to ring-fence the one-off costs during this period, we have adopted the normalisation principles to reflect the true business performance,” reads a statement from Barclays Bank Kenya.

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