Kenya, November 25 – Barclays bank of Kenya (Plc) net profit for the year to September fell by 13.1 per cent, weighed down by low interest income, in the wake of interest rates caps in the country.
The Nairobi Securities Exchange listed company posted an after tax profit of Ksh5.3 billion in the nine months of the year to September 30, 2017, down from Ksh6.1 billion reported in the same period last year.
The lenders net interest income dropped to Ksh16.1 billion compared to Ksh16.9 billion recorded last year, affecting its total revenue which fell to Ksh22.6 billion, from Ksh24.4 billion in September last year.
“This was affected by the macro economic environment,” the bank told the Exchange on tweeter.
According to the lender, political uncertainties in the country and the interest rates caps law that came into force in September 2016, negatively impacted business in the country’s banking sector, affecting its operations.
“This year has presented us with a multiplicity of challenges on the macro-economic and political fronts which have had a direct impact on our revenues” Barclays Bank Kenya managing director Jeremy Awori said.
The lenders’ loan book however grew 5.3 per cent with net loans and advances to customers closing at Ksh167.2 billion, compared to Ksh158.8 billion last year.
Customer deposits also grew by 11 per cent to Sh200.6 billion from Ksh180.9 billion last year, the bank’s financial statement approved by the board on November 22, and published on Wednesday shows.
The results which have also been announced on the NSE shows the lenders’ foreign exchange trading income grew 15.8 per cent to Ksh2.2 billion, from Ksh1.9 billion in a similar period last year.
Interest income from government securities grew to Ksh4.11 billion compared to Ksh4.09 recorded last year.
This reflects the current business environment in the country where banks prefer to invest in government securities, than lend to ‘high risk borrowers’, in the wake of the interest rate cap.
The Banking (Amendment) Act, 2016 caps loan charges at four percentage points above the Central Bank Rate (CBR).
By Martin Mwita