Barclays Bank of Kenya released their results yesterday for the year ended 31st December 2015 and from the look of things they are doing quite well. They registered a profit after tax of Sh8.4 billion, a period during which the bank also registered a 16% growth in net customer assets.
A decision to diversify their revenue streams seems to have paid off as revenue from Mortgage, Bancassurance and SME grew fourfold as compared to the previous year a clear endorsement of the bank’s diversification strategy. SME which the bank identified as a key growth area grew it’s lending by 27% year on year. However, the year’s growth was impacted by volatility in the macroeconomic environment as a result of fluctuating interest rates and a weak shilling that had an effect on the bank’s profits.
Jeremy Awori, Managing Director, Barclays Bank of Kenya had this to say “In the last three years, we have invested heavily in new businesses in a move aimed at diversifying our revenue generating streams so that we can wean the business performance from a reliance on cost management. Whilst it’s still too early for some of these businesses to make a significant impact on our income, they are all showing signs of growth and the bank is therefore confident that they will soon pay off.”
Notable highlights of Barclay’s financial results include:
• Total interest income grew by 10% to KES 25bn on the back of growth in interest earning assets.
• Net customer assets increased by 16% to KES 145bn (2014: KES. 126bn)
• Customer deposits maintained at KES 165bn
• Capital adequacy ratio remained strong at 18.4% against a regulatory limit of 14.5%
• Liquidity ratio of 34.1% remained strong against the regulatory minimum of 20%
On the way forward for the bank, Awori reaffirmed the bank’s commitment to continue with it’s diversification agenda by launching even more new revenue generating streams which include starting a stock brokerage business. The bank has earmarked SME, women, youth and innovation as key growth pillars for the bank and it will therefore invest in these areas.
On the issue of the future of Barclays in this market, Mr. Awori had this to say, “Barclays Bank of Kenya has a strong capital base and liquidity position that ensures we are able to deliver value to all our stakeholders. Our institution is founded on and governed by clear structures and sound business practices that have ensured our successful existence in this country for the last century. We would therefore like to assure you that we remain committed to this market and focused on delivering our growth strategy which is anchored on offering excellent service to our customers and value for our shareholders.”