Barclays profit edges up 3pc to hit Sh3.9b

Barclays Bank posted a net profit of Sh3.87 billion in the first half of this year.

This was an increase of three per cent from a profit-after tax of Sh3.76 billion the lender registered in the same period last year.

The profitability was due to an increase in revenue, while expenses were kept in check.

Interest income increased to Sh15.2 billion compared to Sh14.1 billion, with interest from both government securities and customer loans each increasing by Sh500 million.

Non-interest income increased to Sh5.3 billion from Sh4.7 billion, pushing up the lender’s total revenue to Sh16.3 billion.

Bank costs reduced by three per cent to Sh8.4 billion as the lender put in place cost-cutting initiatives, including automation of its processing centres, investment in alternative channels and branch rationalisation programmes.

The bank’s expenses also included a one-off cost that the lender ring-fenced for the rebranding process which is 65 per cent complete.

Absa, an African banking group, acquired a majority stake of 68.5 per cent in Barclays Kenya.

The bank said it will invest in systems that need to be separated, the transitional service agreements costs paid to Barclays Plc for the provision of various services during the separation period as well as expected rebranding costs.

As a result during this period under review, the bank put aside Sh561 million as an exceptional item for these investments.

Over the period, the bank faced an image crisis after a safe deposit box with fake dollars stored in a safe box in one of its branches.

There was also a break-in at one of its automated teller machines.

“We went through a bit of a storm. That is why we are pleased with these results,” said Barclays Kenya Chief Executive Jeremy Awori.

The bank insisted that these occurrences never affected them as they were still able to mobilise more deposits from customers even as its share price at the Nairobi Securities Exchange (NSE) emerged as the second-best performing banking stock.

This even as the lender warned that the separation from Barclays Plc will have an impact on its financial results over the next two years.