Barclays pre-tax profit edges down

By James Anyanzwa and Reuters

Barclays Bank of Kenya (BBK) has posted a two per cent decline in nine-month pretax profit to Sh9.10 billion ($105.5 million), curbed by a fall in non-interest income.

The lender, which is controlled by Britain’s Barclays, bucked the trend among big banks in the east African nation, who have posted single- to double-digit growth in earnings for the period.

The increased profitability for the other banks was mainly driven by a drop in interest rates, which boosted demand for loans and cut interest expenses on deposits, as well as good performances in regional subsidiaries such as Rwanda.

Barclays Kenya said in a statement yesterday its net interest income went up by four per cent to Sh14.04 billion but the gain was offset by a two per cent fall in non-interest income and a slight jump in costs.

Earnings per share inched up to Sh1.15 from, up from Sh1.03 in the year-ago period, the bank said.

BBK’s half-year pre-tax profit also fell 13 per cent to Sh5.5 billion weakened by a one-off payment for early retirement costs. During the first quarter of this year (2013) BBK’s   earnings nose-dived   17 per cent with managing director Jeremy Awori attributing the decline in profitability to voluntary staff exit programme, which affected around 170 workers costing the bank a massive Sh658 million.

 “The impact of this exercise is seen in the non-recurring restructuring cost of Sh658million recognised as an exceptional item in the first quarter of 2013,” he said

Awori said the bank is working on cutting edge products for its clients, which would be released in the market during the second half of this year.

During Barclays annual general meeting, the bank chairman Francis Okello sought to calm shareholders who felt the bank is being surpassed by its competitors.

He told the shareholders its growth pace is a deliberate strategy rather than an indication of declining performance. “We avoid growth for the sake of it, chasing numbers is a dangerous strategy,” he said