Barclays Bank profit declines by 17 per cent

Barclays Bank chairman Francis Okello (left) and managing director Jeremy Awori during the AGM on May 30, 2013. Photo/SALATON NJAU  NATION MEDIA GROUP

By NATION REPORTER
 

 

Barclays Bank of Kenya has become the second top lender to register a decline in profits, posting a 17 per cent fall in after-tax earnings for the first quarter.

The bank’s profit for three months to March 2013 was Sh2.4 billion down from Sh2.9 billion recorded in the same period last year.
 

The drop is attributed to a marginal reduction in interest income and one-off item on restructuring cost.

Restructuring cost

The bank incurred Sh658 million in what it called restructuring cost brought about by what the management term as need to leverage on technology with the company initiating a voluntary staff exit programme.

“The impact of this exercise is seen in the non-recurring restructuring cost recognised as an exceptional item in the first quarter of 2013,” said the bank’s managing director Mr Jeremy Awori in a statement to media houses.

This is the second time in two years that the bank is laying off staff to contain cost.

Interest income remained unchanged at Sh5.13 billion from Sh5.17 billion last year due to falling market interest rates.

Net Loans and advances to customers increased by 8 per cent to Sh108 billion from Sh100 billion last year, which saw interest income also rise to Sh6.7 billion.

Customer deposits increased by 12 per cent to Sh139 billion from Sh124 billion in the period under review, which the bank said assisted it to increase lending and increase investment in Government assets.

Operating costs declined to Sh3.6 billion from Sh3.7 billion in 2012.

The bank has said it is working on new products which it expects to roll out to the market in the second half of the year.