Barclays Bank Kenya First-Half Profit Rises on Loan GrowthCharles Wachira
Barclays Plc’s Kenyan unit reported a 13 percent advance in first-half profit on loan growth and said for the rest of the year it will focus on increasing assets under its management.
Net income rose to 4.2 billion shillings ($48 million) in the six months through June from 3.7 billion shillings a year earlier, Barclays Bank of Kenya Ltd. said in a statement today in the capital, Nairobi. Net interest income increased to 9.7 billion shillings from 9.2 billion shillings.
“Going into the second half of the year, the bank is focusing on growing its assets,” improving customer services and boosting its “visibility,” according to the statement.
Barclays is boosting lending as borrowing costs in the East African nation run almost double the central bank’s benchmark rate. Commercial bank lending rates as of June stood at 16.4 percent on average, while the policy rate was 8.5 percent. The key lending rate since last month is being used in a formula to price loans, as part of an effort by the government to lower commercial bank lending rates.
Customer loans jumped 20 percent to 128 billion shillings in the first half, while total assets grew 15 percent to 213 billion shillings, the bank said.
Barclays, which was an adviser on a $2 billion Eurobond sale the government concluded in June, wants more of those types of projects and is creating a mortgage center and an investment-banking division to boost earnings, according to the statement. The investment-banking unit will help the lender expand its transactional-service presence in debt and equity markets, mergers and acquisitions, the lender said.
“We are implementing a three-year strategy whose goal is to make Barclays one of the top three banks in Kenya in revenues,” the bank said. “To achieve this, we are refocusing our efforts on key transformational projects such as the recently concluded Eurobond in order to sustain a good performance.”
The stock gained as much as 0.6 percent and traded unchanged at 17.05 shillings by 12:59 p.m. in Nairobi.