Barclays Kenya annual profit flat as loss provisions grow

Bloomberg

Barclays Africa Group’s Kenyan unit reported full-year profit that was little changed as bad loans increased on rising credit costs.
Net income was 8.4 billion shillings ($83 million) in the 12 months through December, compared with 8.39 billion shillings a year earlier, Barclays Bank of Kenya Ltd. Chief Financial Officer Yusuf Omari told reporters Friday in the capital, Nairobi. Net interest income, the money earned from charges on loans, grew 4.1 percent to 20.4 billion shillings, outpaced by loan-loss provisions, which jumped 26 percent.
“The numbers are not good largely as a result of high loan-loss impairment,” Maurice Oduor, an analyst at Cytonn Investments Management Ltd., said in an interview. “The core banking system didn’t do so well as well.”
Kenya’s central bank raised interest rates by 300 basis points last year to 11.5 percent to curb accelerating inflation and a weakening currency. Commercial bank lending rates stood at 18.3 percent in December from 16.1 percent in June.
Shares in Barclays Bank Kenya rose 2.5 percent on Friday to 12.15 shillings, paring its decline this year to 11 percent.
“Shareholders are okay as Barclays has the highest dividend yield in the market,” Oduor said.
Barclays Kenya’s parent in London announced plans this week to sell down its 62.3 percent holding in Johannesburg-based Barclays Africa Group. Barclays Africa owns 69 percent of Barclays Kenya.
“I want to be very clear, this is a reduction and not an exit of Barclays Bank of Kenya,” Managing Director Jeremy Awori told reporters in Nairobi. “The business is here to stay.”
Barclays is a British multinational banking services company headquartered in London. It is a universal bank with operations in retail, wholesale, investment banking, wealth management and mortgage lending.

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