Barclays managing director Jeremy Awori. FILE PHOTO | NMG
Summary
- The bank described the period as marked by harsh economic conditions, political uncertainties and the impact of interest rates caps.
- Lender blames interest rates caps for a four per cent decline in net interest income.
- The lender however posted a five-per cent growth in the customer loans to Sh167 billion.
Barclays Kenya's Group net profit fell 12 per cent in the first nine months of the year compared to the same period last year.
The
lender’s after-tax profit stood at Sh5.3 billion, down from Sh6.1
billion last year, according to results released Wednesday evening.
The
bank noted that performance for the period was impacted by a four per
cent decline in net interest income to Sh16.1 billion resulting in an
eight per cent reduction in total revenue to Sh22.6 billion.
“This
is largely due to the impact of the interest rates’ law that resulted
in yields on interest earning assets declining from 14.2 per cent to
12.6 per cent,” the bank said in a statement accompany the results.
Tough climate
The
bank described the period as marked by harsh economic conditions,
political uncertainties and the impact of interest rates caps that came
into force in September 2016.
“This year has presented
us with a multiplicity of challenges on the macro-economic and political
fronts which have had a direct impact on our revenues. The prolonged
electoral period has presented a climate of uncertainty which has been
challenging for businesses whilst the interest rates law continues to
undermine our interest income,” said Jeremy Awori, Managing Director of
Barclays Bank Kenya.
The lender however posted a
five-per cent growth in customer loans to Sh167 billion, mainly driven
by a five-per cent and eight-per cent growth in the consumer bank and
SME bank businesses respectively.
Customer deposits
grew by 11 per cent to Sh200 billion mainly driven by transactional
accounts following the launch of new products such as the Twin Account.
The
transactional accounts balances accounted for 71 per cent of the
deposits up from 61 per cent in the previous period, resulting in the
average cost of funds dropping to 2.4 per cent.
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