Barclays Bank of Kenya’s pretax profit fell 2 percent last year to 12.07 billion shillings ($119.1 million) due to increased bad debt provisions, higher costs and interest rate volatility, it said on Friday.
The bank is part of Barclays Africa, where majority owner Barclays Plc (LSE: BARC.L – news) wants to reduce its stake. Barclays said earlier this week it would aim to sell down its 62.3 percent stake in Barclays Africa, which runs Absa in South Africa and Barclays branded banks in 13 other countries.
Barclays Kenya’s chief executive Jeremy Awori said this week Barclays’ decision to sell its Africa business would not lead to job cuts in Kenya.
Awori said on Friday the bank’s efforts to diversify revenues by increasing lending to small and medium enterprises had started to pay off.
Lending in that segment rose 27 percent during the period. The bank was previously focused on lending to top firms and high net worth individuals before changing tack last year.
But the impact of the higher lending was offset by a 26 percent jump in provisions for bad debts to 1.76 billion shillings. Costs increased 7 percent to 15.62 billion shillings, Yusuf Omari, the company’s finance director, said.
Kenyan banks were generally affected by an increase in lending rates by the central bank in the middle of last year, which sent commercial rates as high as 25 percent.
Barclays Kenya maintained its total dividend for the year at 1.00 shillings including an interim dividend of 0.2 shillings that has already been paid.
($1 = 101.3500 Kenyan shillings)