Barclays Bank posts Sh1.8bn profit on Treasuries boost

Barclays Kenya MANAGING DIRECTOR JEREMY AWORI . FILE PHOTO | NMG 

By VICTOR JUMA

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Summary

• The lender reported a net profit of Sh1.8 billion in the period compared to Sh1.7 billion the year before, with its investment in government bonds and Treasury bills surging 52 per cent to Sh67 billion.
• This helped raise total interest income 8.1 per cent to Sh6.9 billion.
• Banks have trimmed their lending to the private sector and piled into government debt in the wake of interest rate controls, arguing that a large section of prospective borrowers cannot be profitably accommodated in the current interest rate ceilings.

Barclays Bank of Kenya has posted a 7.5 per cent net profit growth in the first quarter ended March, helped by increased purchases of Treasury securities.

The lender reported a net profit of Sh1.8 billion in the period compared to Sh1.7 billion the year before, with its investment in government bonds and Treasury bills surging 52 per cent to Sh67 billion.

This helped raise total interest income 8.1 per cent to Sh6.9 billion. Banks have trimmed their lending to the private sector and piled into government debt in the wake of interest rate controls, arguing that a large section of prospective borrowers cannot be profitably accommodated in the current interest rate ceilings.

Barclays’ interest income from lending to customers also went up despite a 1.8 per cent decline in lending to Sh165.5 billion.

The lender also benefited from a 25.7 per cent decline in loan loss provisions to Sh575.4 million despite gross defaults rising 7.8 per cent to Sh12.6 billion. Barclays ended the quarter in compliance with capital ratios even without factoring in boosters afforded by the Central Bank of Kenya’s directive allowing lenders to add expected credit loss provisions back to capital.

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