Barclays Bank of Kenya FY’2016 results: Profit after tax declined by 12.3% to Ksh.7.4 billion
Barclays Bank of Kenya Ltd released their FY’2016 results recording core earnings per share decline of 12.5 percent to Ksh.1.4 from Ksh.1.6 in FY’2015. The drop in core earnings was driven by a 19.8 percent growth in total operating expenses which outpaced a 7.5 percent growth in total operating revenue.
Key highlights for the performance from FY’2015 to FY’2016 include:
- Total operating revenue grew by 7.5 percent to Ksh.31.7 billion from Ksh.29.5 billion in FY’2015. This was supported by a 9.4 percent growth in Net Interest Income and a 3.3 percent growth in Non-Funded income
- Net Interest Income grew by 9.4 percent to Ksh.22.3 billion from Ksh.20.4 billion. This was supported by 11.2 percent growth in interest income to Ksh.28.1 billion from Ksh.25.3 billion in FY’2015, despite a faster growth in interest expense of 18.7 percent to Ksh.6 billion from Ksh.5.9 billion in FY’2015, resulting into a Net Interest Margin of 10.5 percent from 10.4 percent in FY’2015
- Non-funded income (NFI) recorded an increase of 3.3 percent to Ksh.9.3 billion from Ksh.9.1 billion in FY’2015. The increase in NFI was driven by a 161 percent rise in other income from fixed income trading and Bancassurance, to Ksh.1 billion from Ksh.0.4 billion in FY’2015, and a 28.8 percent increase in forex income to Ksh.2.6 billion from Ksh.2 billion in FY’2015. The current revenue mix stands at 70:30 funded to non-funded income from 69:31 in FY’2015
- Total operating expenses grew by 19.8 percent to Ksh.20.8 billion from Ksh.17.4 billion in FY’2015 following a 122.4 percent y/y growth in Loan Loss Provision (LLP) to Ksh.3.9 billion from Ksh.1.8 billion. Without LLP, operating expenses grew 8.2 percent to Ksh.16.9 billion from Ksh.15.6 billion registered in FY’2015. Staff costs grew marginally by 4.6 percent to Ksh.9.7 billion from Ksh.9.3 billion in FY’2015
- Cost to income ratio worsened to 64.3 percent from 59 percent in FY’2015. Without LLP, cost to Income ratio stood at 53.4 percent from 53 percent in FY’2015
- Profit after tax declined by 12.3 percent to Ksh.7.4 billion from Ksh.8.4 billion in FY’2015
- Loan and advances grew by 15.9 percent to Ksh.168.5 billion from Ksh.145.4 billion while customer deposits grew by 7.9 percent to Ksh.178.2 billion from Ksh.165.1 billion leading to an increase in the loan to deposit ratio to 94.6 percent from 88.1 percent; the LDR has reached unacceptably high levels
Barclays Bank of Kenya Ltd is currently sufficiently capitalized with a core capital to risk weighted assets ratio at 15.7 percent. This is 5.2 percent above the statutory requirement. The total capital to total risk weighted assets exceeds the statutory requirement by 3.4 percent to close the period at 17.9 percent.