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Barclays Bank of Kenya to adopt new name

By Fredrick Obura | Published Fri, March 2nd 2018 at 11:13, Updated March 2nd 2018 at 11:31 GMT +3
Barclays Bank of Kenya CEO Jeremy Awori (PHOTO: FILE)

NAIROBI, KENYA: Over 300 employees exited Barclays Bank of Kenya in 2017 following a restructuring plan which included closure of several branches mainly in Nairobi.

The bank said on Thursday that it closed last year with 2,268 employees compared to 2,591 in 2016.

The bank on October 1 2017 relocated seven branches (Moi Avenue, Haile Salassie, Waiyaki Way, Kawangware, Rahimtulla, Nakumatt Meru branch and Wundanyi branch in a move to save cost.

Barclays Kenya Chief Executive Jeremy Awori  said that the restructuring was mainly concentrated in Nairobi where it had several branches located within metres of each other. 

The lender, the first local bank to announce its full-year results under the rate cap regime, said it posted Sh6.9 billion net profit in 2017.

This was 6.4 per cent lower than the Sh7.3 billion net profit the bank posted in 2016. The performance goes to show banks are still struggling to figure a way to make money outside interest on loans following the coming into force of the legislation capping interest rates at four percentage points above the Central Bank Rate (CBR), presently standing at 10 per cent. 

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Cost-cutting measures

The law has limited the ability of banks to levy huge margins on their books as it means they can only charge interest on loans at a maximum of 14 per c

NAIROBI, KENYA: Over 300 employees exited Barclays Bank of Kenya in 2017 following a restructuring plan

The bank said on Thursday that it closed last year with 2,268 employees compared to 2,591 in 2016.

The bank on October 1 2017 relocated seven branches (Moi Avenue, Haile Salassie, Waiyaki Way, Kawangware, Rahimtulla, Nakumatt Meru branch and Wundanyi branch in a move to save cost.

Barclays Kenya Chief Executive Jeremy Awori  said that the restructuring was mainly concentrated in Nairobi where it had several branches located within metres of each other. 

The lender, the first local bank to announce its full-year results under the rate cap regime, said it posted Sh6.9 billion net profit in 2017.

This was 6.4 per cent lower than the Sh7.3 billion net profit the bank posted in 2016. The performance goes to show banks are still struggling to figure a way to make money outside interest on loans following the coming into force of the legislation capping interest rates at four percentage points above the Central Bank Rate (CBR), presently standing at 10 per cent. 

Cost-cutting measures

The law has limited the ability of banks to levy huge margins on their books as it means they can only charge interest on loans at a maximum of 14 per cent.

The lender was expected to rally non-interest income having acquired First Assurance in 2016.

Its non-interest income, however, fell by almost Sh1 billion from Sh9.3 billion in 2016 to Sh8.4 billion last year.

“Focus on non-interest income has been key to our business strategy. We see the insurance business bringing in Sh500 million, the fixed income trading bringing in Sh900 million and the stocks brokerage business introducing new products like the new Gold ETF,” said Awori at a press briefing in Nairobi.

Meanwhile the bank is set to rebrand to Absa Group Ltd

This will see the Barclays brand disappear from the Kenyan market in about two years following the sale of Barclays Plc’s stake in the Johannesburg-based Barclays Africa Group.

The name change, which is subject to shareholder approval, is likely to fuel speculation about the lender’s future in the local market in the wake of a decline in profitability and a tighter regulatory environment following the introduction of the rate cap.

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The lender was expected to rally non-interest income having acquired First Assurance in 2016.

Its non-interest income, however, fell by almost Sh1 billion from Sh9.3 billion in 2016 to Sh8.4 billion last year.

“Focus on non-interest income has been key to our business strategy. We see the insurance business bringing in Sh500 million, the fixed income trading bringing in Sh900 million and the stocks brokerage business introducing new products like the new Gold ETF,” said Awori at a press briefing in Nairobi.

Meanwhile the bank is set to rebrand to Absa Group Ltd

This will see the Barclays brand disappear from the Kenyan market in about two years following the sale of Barclays Plc’s stake in the Johannesburg-based Barclays Africa Group.

The name change, which is subject to shareholder approval, is likely to fuel speculation about the lender’s future in the local market in the wake of a decline in profitability and a tighter regulatory environment following the introduction of the rate cap.


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