alexa Barclays half-year profit up 8 per cent to Sh4.6bn - Daily Nation

Barclays half-year profit up 8 per cent to Sh4.6bn

Thursday August 13 2015

Barclays launched an innovation hub for financial technology solutions developers in Nairobi on September 24, 2015.

Barclays Bank CEO Jeremy Awori during an investor briefing on the bank's half-year performance on August 13, 2015. Barclays launched an innovation hub for financial technology solutions developers in Nairobi on September 24, 2015. PHOTO | DIANA NGILA | NATION MEDIA GROUP 

Barclays Bank has recorded 8 per cent increase in its profit after tax to Sh4.6 billion for the period ending June 30. The bank realised Sh4.2 billion net profit in the same period last year.

The managing director, Mr Jeremy Awori, attributed the performance to the new financial streams that included bancassurance (selling of insurance products) and introduction of charges for use of its ATMs. Previously, customers were not paying for ATM services.

“The launch of the Barclays mortgage centre in the first half is already yielding positive results for the bank. As at June, the value of mortgage applications recorded was almost double what the bank recorded during the whole of 2014.

For its part, bancassurance is showing great promise and we expect that it will be major contributor of our non-funded income line within the next two to three years,” Mr Awori said.

Non-net interest income went up by 12 per cent to Sh4.8 billion up from Sh4.3 billion realised in a similar period in 2014.

“New revenue streams such as bancassurance, mortgage and asset finance centres of excellence contributed to this growth,” he said.

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He said the net interest income increased by 4 per cent to Sh10 billion up from Sh9.7 billion in the same period last year. This was largely due to growth in interest earning assets despite the pressure of declining interest margins.

The lender’s customer deposits increased by 10 per cent during the period under review to Sh163 billion from Sh148 billion.

Total assets grew by 10 per cent to Sh235 billion compared to Sh213 billion in the same period last year.

The $50 million (Sh4.5 billion) subordinated loan from Barclays Africa Group, which was drawn down during the period further positioned the financial institution to take up more business.

The bank’s chief financial officer, Mr Yusuf Omari, said the tax credit realised by the bank had further boosted the half year financial results.

“We had tax credit which improved our effective tax rates,” he said.

Going forward, Mr Omari said the bank will seek to attract more customers by aggressive marketing through their 1,000 salesmen spread across the country, adding that the days when banks waited for walk-in customers to their branches were gone.

The bank will also roll out a strategy of attracting the small and medium enterprise after setting aside Sh30 billion for lending to these enterprises. The bank will also be signing an LPO financing for women, youth and persons with disability while it has set up an agribusiness unit to cater for the expanding business segment.