Barclays Bank of Kenya yesterday announced net earnings in nine months through September fell 5.31 per cent on increased operating costs and provisions for bad debt.
Analysts at Standard Investment Bank (SIB) said a Non-performing Loan (NPL) ratio of 6.6 per cent, levels that were last seen in 2010, was way ahead of their 2016 forecast of 5.5 per cent. “A jump in loan loss provision weighed down earnings since the net operating income before provisions was up 17.3 per cent year on year,” SIB researchers said in a note to investors.
The country’s fifth largest lender by market share said the net profit between April and September 2016 dropped to Sh.6.06 billion from Sh.6.40 billion in the same period last year.
The decline in profit has been attributed to operating costs and provisions against bad loans that increased 24.66 and 45.86 per cent, respectively, year-on-year.
Operating costs jumped to Sh15.72 billion from Sh12.61 billion in the review period, while it allocated Sh4.58 billion against loan defaults from Sh3.14 billion last year.
The bank becomes the first among the seven tier-one lenders that have so far released their third-quarter financial performance post-rate cap.
Barclays said it mobilised Sh21.41 billion more in customer deposits to reach Sh180.86 billion in September from Sh159.45 billion it posted 12 months earlier.
