Barclays retains dividend despite 13pc net profit dip

Tuesday August 15 2017

Barclays Kenya chief executive Jeremy Awori. PHOTO | MARTIN MUKANGU | NMG

Barclays Kenya chief executive Jeremy Awori. PHOTO | MARTIN MUKANGU | NMG 

By DAVID HERBLING
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Barclays Kenya #ticker:BBK has maintained an interim dividend of Sh0.20 per share despite half-year net earnings dipping 13.3 per cent, weighed down by lower interest income as the rate cap regime narrowed the lender’s revenue from loans.

The top-tier lender made Sh3.54 billion in after-tax profit in the six months to June 2017 compared to Sh4.08 billion posted in a similar period a year earlier.

Net interest earnings dropped by Sh553 million to Sh10.5 billion from Sh11.09 billion in June 2016 — highlighting the impact of the rate caps which were not in place in the first half of last year.

Chief executive Jeremy Awori attributed the performance to a “challenging operating environment that is largely characterised by tough macro-economic conditions and the effects of the new interest rates law”.

Barclays’ shareholders will pocket a total of Sh1.08 billion in dividends, similar to what was paid out in the half-year to June 2016.

The interim dividend will be paid on October 13 to shareholders on record as of September 8.

The bank’s loan book expanded by Sh10.47 billion to hit Sh163 billion, with the lender also raising its purchase of government debt by Sh5.4 billion to Sh52.6 billion.

“Continued growth in the SME loan book is a clear demonstration that the decision by the bank to make capital and training more accessible to SMEs is paying off,” Mr Awori said in a statement.

Non-interest income from fees and commissions dropped 14.5 per cent to Sh4.3 billion in the six-month period under review.

Cash set aside to cover for bad loans dropped by a third to Sh1.3 billion from Sh2 billion in June last year, despite a slight rise in non-performing loans.

Barclays says the lower provisions are informed by “enhanced internal efficiencies on the collections and recoveries front as well as a better performance from the new bookings”.

Customer deposits grew by 3.2 per cent to Sh188.6 billion in the period under review.