Barclays Bank of Kenya (BBK) announced a profit after tax of sh8.4 billion for the year ended 31 December 2015, largely supported by a 16 percent growth in net customer assets.
The bank noted that 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. Small and Medium Enterprises (SME) which the bank has identified as a key growth pillar, grew its lending book by 27 percent year –on- year.
“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 Mr. Jeremy Awori, Managing Director, Barclays Bank of Kenya.
The past one year has been tough for financial services. Fluctuating interest rates and a weakening shilling have had an effect on bank’s trading books. For Barclays, there was also an increase in impairment charges due to external shocks and a reduction in margins due to the rising cost of funds.
Despite the rising trends of non-performing loans in the industry, the bank’s ratio of gross non-performing loans to gross loans at 3.6 percent is below industry trends. However, the loan loss rate went up marginally by 10 basis points to 1.2 percent from 1.1 percent in 2014.
The liquidity ratio is strong at 34.1 percent compared to the regulatory minimum of 20 percent.
Looking forward, Barclays Bank further plans to enhance its accessibility by implementing a robust Agency banking strategy with Postal Corporation of Kenya and other partners and to continue its systems upgrade by modernizing its entire ATM fleet by June this year.
Barclays Bank of Kenya is celebrating its centenary year, a significant milestone. It however has an urgent issue of ownership that it needs to address in the immediate term in order to maintain its customer confidence. In general, the bank has said that any changes to its majority shareholding will take two to three years.
That notwithstanding, Mr. Awori assured that the bank is committed to Kenya and focused on delivering its growth strategy which is anchored on offering excellent service to our customers and value for our shareholders.