Barclays Q3 profit up 3pc

Barclays Bank branch on Muindi Mbigu Street in Nairobi. PHOTO | FILE 

By BD REPORTER

In Summary

• Barclays attributed the lacklustre growth in net interest income to a 45 per cent rise in interest expense arising from an increase in cost of funds in the market.

Barclays Bank of Kenya has announced a profit after tax of Sh6.4 billion for the nine-month period ended September 30.

The growth was driven by a 10 per cent year-on-year increase in net customer assets, with growth mainly coming from the lender’s retail and SME segments.

“Barclays has in the last nine months introduced banking solutions meant to support the growth of Kenya’s growing SME sector. These include the Asset Based Finance Centre of Excellence, the 48-hour loan approval turnaround time and the launch of the Sh30 billion SME loan fund,” said Jeremy Awori, Barclays’ managing director.

“These initiatives and the upward review of the unsecured lending cap to Sh6 million are helping to position Barclays as Kenya’s ‘go-to’ bank for the SME sector.”

He observed that the review period has been characterised by turbulence at the macroeconomic level arising from fluctuation of the local currency and high interest rates, with the 91-day T-Bill reaching a high of 22 per cent.

This raised the lender’s interest expenses and resulted in unrealised losses on the government securities it holds for trading.

Mr Awori said the macroeconomic challenges have started to recede and this should reverse the mark-to-market losses.

The bank’s total interest income grew nine per cent in the period to Sh18.5 billion on the back of increased lending.

Lending to customers increased by 10 per cent to Sh139 billion. Customer deposits rose four per cent to Sh159 billion, contributing to the 45 per cent jump in interest expenses.

Barclays’ ratio of total non-performing loans to net loans stood at 4.1 per cent, below the 5.7 per cent seen in the overall banking industry.

Mr Awori noted that the bank is well capitalised, staying above the various statutory ratios.