Despite continental unease with Barclays Bank, the bank’s subsidiary in Kenya has announced a profit after tax of Sh8.4bn for the year ended 31 December 2015.
During the period under review, the Barclays Bank of Kenya registered a 16% growth in net customer assets.
Investments made in new revenue generating streams such as Bancassurance, mortgage and SME saw the bank’s total income grow fourfold compared to the previous year, an endorsement of the bank’s diversification strategy. SME, which the bank has identified as a key growth pillar, grew its lending book by 27% year –on- year.
This year’s growth was impacted by volatility in the macroeconomic environment as a result of fluctuating interest rates and a weakening shilling which had an effect on the bank’s trading book. This is in addition to an increase in impairment charges due to external shocks and a reduction in margins due to the rising cost of funds.
“In the last three years, we have invested heavily in new businesses in a move aimed at diversifying our revenue generating streams so that we can wean the business performance from a reliance on cost management. Whilst it’s still too early for some of these businesses to make a significant impact on our income, they are all showing signs of growth and the bank is therefore confident that they will soon pay off,” said Jeremy Awori, the bank’s managing director.
For the year, total interest income grew by 10% to Sh25bn on the back of growth in interest earning assets while net customer assets increased by 16% to Sh145bn.
Customer deposits maintained at Sh165bn, the capital adequacy ratio remained strong at 18.4% against a regulatory limit of 14.5% and the liquidity ratio of 34.1% remained strong against the regulatory minimum of 20%.
Within the same period, net interest income increased by 4% to Sh20.4bn up from Sh19.6bn. The growth was impacted by a 46% rise in interest expense arising from 70 basis points increase in cost of funds.
Unexpected fluctuations in interest rates in the market led to a significant mark to market loss on government securities. However, new revenue streams such as Bancassurance pushed non-interest income up by 4% to Sh9.1bn. Total Operating Income rose by 4% to Sh29.5bn compared to Sh28.2bn in the same period last year.
This year, BBK is celebrating its centenary year and Awori says the bank will continue its diversification agenda by launching even more new revenue generating streams including starting a stock brokerage business.
Just last week, the bank launched the Barclays Mobile Point of Sale (MPOS) which is a small phone-like GPRS device that accepts all VISA, MasterCard and AMEX cards. This POS will arguably enable Kenyans pay for low-value transactions with ease, speed and convenience.
The bank further plans to enhance its accessibility by implementing a robust agency banking strategy with Postal Corporation of Kenya and other.
Photo: BBK MD Jeremy Awori (C). He says all investments are showing signs of growth.